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):
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.
Tiger Legatus Master Fund was up 0.1% net for the second quarter, compared to the MSCI World Index's 7.9% return and the S&P 500's 8.5% gain. For the first half of the year, Tiger Legatus is up 9%, while the MSCI World Index has gained 13.3%, and the S&P has returned 15.3%. Q2 2021 hedge Read More
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.