Question

TODAY? PRESENT TIME : What are some of the risks Wells Fargo faces with? Specifically what and how?

economic conditions? how does this affect them? Regulatory policies? or the mortgage issue?

please give as many details!

Answer 1

Introduction:

wells fargo and company is a loading global finacial services company with $2.0 trillon in assert founded in 1852 and head quarted in san francisco. and to satisfy customer financial needs and help them succes financially,in 2016 wells fargo workers had opened 3.5 million deposit and credit card acounts without customers authorization.since the, more has come to light. the bank charged forb insurance for auto loan customers without them knowing it and extra fees on some mortgages. most recently its wealth management division has come under scrutiny for sales practices

In response to thesre issues, the consumer financial protection Bureau ("CFPB") the currency ("OCC") and federal reserve, took public enforcement actions against wells fargo in 2016 and 2018.these actions resulted in the agencies entering into five separate consent orders with wells fargo;the CFPB' s and OCC's september 8, 2016 sales practices consent orders: the federal reserve's february 2,2018 risk management consent orders. under each of the afformentioned consent orders, wells fargo committed to take steps to remediate harmed customers and develop effective internal controls over risks such as employee misconduct.to date wells fargo has yet to fully satisfy any of the afforementioned orders.

There are plenty of potential risks that wellsa fargo still faces as we nmove further into brave new post crisis world but these three should be front and centre of investors

• standard financial risks
• interst rate risk
• credit risk
• legal risk
• regulatory risks

Decentralized structure:

• promoted an aggressive sales culture that emphasized cross selling and revenue generation throughout all levels of the organisation
• Decetralization also applied to risk management,which was underfunded,under resourced,and under valued by the management.
• This policy worked well and was very profiable for many years,but it also allowed problem to accumulate,undetectted until they burst into view in sep-2016.

Conclusion:

It may be the case that what made wells fargo so successful an aggressive sales culture,also facilitates wide spread consumers harms,it is owning up to their problem may also requring owing upto a fucture that is not as profitable as past.