Bloomberg Radio Interview on Wells Fargo – December 15

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Bloomberg Radio Interview on Wells Fargo – December 15
Photo by thetaxhaven

Wells Fargo (NYSE:WFC), recently failed a “living will” test, required by Dodd-Frank, for the second time.    I was interviewed on Bloomberg Radio on December 15 to discuss this issue.  In an article posted by Smith Brain Trust (University of Maryland, Robert H. Smith School of Business):

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Wells Fargo’s recent “living will” stumble is just that, says finance professor David Kass at the University of Maryland’s Robert H. Smith School of Business. He says he expects the San Francisco-based bank to submit a satisfactory financial crisis contingency plan to regulators the next time around.

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Wells Fargo failed to meet Federal Reserve and FDIC standards for a living will – a key requirement under Dodd-Frank, as a big bank’s plan for unwinding in a financial crisis minus taxpayer-funded bailouts. “I found [the failure] extremely surprising given that Wells Fargo has been one of the best managed banks in the country along with JPMorgan Chase,” Kass recently told Bloomberg Radio. “And I think it will be relatively easy and doable for Wells to meet this requirement at the next deadline – at the end of March 2017.”

Wells Fargo is one of Berkshire Hathaway’s largest common stock investments. This holding is currently valued at $28 billion and represents a 10% stake in the company.  Warren Buffett recently applied to seek regulatory approval to increase Berkshire Hathaway’s stake beyond 10%.  Berskshire Hathaway has invested in Wells Fargo since 1989.

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David I Kass Clinical Associate Professor, Department of Finance Ph.D., Harvard University Robert H. Smith School of Business 4412 Van Munching Hall University of Maryland College Park, MD 20742-1815 Phone: 301-405-9683 Email: [email protected] (link sends e-mail) Dr. David Kass has published articles in corporate finance, industrial organization, and health economics. He currently teaches Advanced Financial Management and Business Finance, and is the Faculty Champion for the Accelerated Finance Fellows. Prior to joining the faculty of the Smith School in 2004, he held senior positions with the Federal Government (Federal Trade Commission, General Accounting Office, Department of Defense, and the Bureau of Economic Analysis). Dr. Kass has recently appeared on Bloomberg TV, CNBC, PBS Nightly Business Report, Maryland Public Television, Business News Network TV (Canada), Fox TV, American Public Media's Marketplace Radio, and WYPR Radio (Baltimore), and has been quoted on numerous occasions by Bloomberg News and The Wall Street Journal, where he has primarily discussed Warren Buffett and Berkshire Hathaway. He has also launched a Smith School “Warren Buffett” blog. Dr. Kass has accompanied MBA students on trips to Omaha for private meetings with Warren Buffett, and Finance Fellows to Berkshire Hathaway’s annual meetings. He is an officer of the Harvard Business School Club of Washington, DC, and is a member of the investment and budget committees of a local nonprofit organization. Dr. Kass received a Smith School “Top 15% Teaching Award” for the 2009-2010 academic year.

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