In all the hustle and bustle of the twilight of our republic holiday season, we almost forgot that today was the day big banks heard about the results of their living will tests.
But now that the FDIC press release is out, we're just gonna give it a quick read through and make sure that nobody's getting coal in their regulatory stocking this year...
The Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve Board on Tuesday announced that Bank of America, Bank of New York Mellon, JP Morgan Chase, and State Street adequately remediated deficiencies in their 2015 resolution plans.
Nice job almost everyone.
The agencies also announced that Wells Fargo did not adequately remedy all of its deficiencies and will be subject to restrictions on certain activities until the deficiencies are remedied.
What can we even say at this point, Wells Fargo? Are you even trying anymore? Is there something you want to talk about? Are you depressed? Is it drugs? Just tell us that it's drugs and we'll do something.
In the meantime, it seems like the FDIC and Fed have decided that you're grounded...
The agencies jointly determined that Wells Fargo did not adequately remedy two of the firm's three deficiencies, specifically in the categories of "legal entity rationalization" and "shared services." The agencies also jointly determined that the firm did adequately remedy its deficiency in the "governance" category. In light of the nature of the deficiencies and the resolvability risks posed by Wells Fargo's failure to remedy them, the agencies have jointly determined to impose restrictions on the growth of international and non-bank activities of Wells Fargo and its subsidiaries. In particular, Wells Fargo is prohibited from establishing international bank entities or acquiring any non-bank subsidiary.
It's for your own good, Wells Fargo. We know you're having a tough year and we want to help, but the first step to getting better has to be yours, and quite frankly we're not even sure that you're trying anymore. You can't admit that you have a problem with cross-selling even after the scandal, the layoffs, the Congressional beat-downs. Dammit to hell, Wells Fargo, you even lost Carrie and Stumpfy! And then there's the whole thing with the racist lending?
What is it going to TAKE?!?!
You've got one more shot at this...
The firm is expected to file a revised submission addressing the remaining deficiencies by March 31, 2017. If after reviewing the March submission the agencies jointly determine that the deficiencies have not been adequately remedied, the agencies will limit the size of the firm's non-bank and broker-dealer assets to levels in place on September 30, 2016. If Wells Fargo has not adequately remedied the deficiencies within two years, the statute provides that the agencies, in consultation with the Financial Stability Oversight Council, may jointly require the firm to divest certain assets or operations to facilitate an orderly resolution of the firm in bankruptcy.
We're rooting for you, Wells Fargo. But now it's time to root for yourself.