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Wells Fargo shares popped Wednesday after the Federal Reserve reportedly signaled that it will accept the firm’s plan to overhaul its governance functions, clearing the path for it to be released from a regulatory restriction.
Wells Fargo climbed 4.8% in trading.
The Fed has privately signaled that it would accept the bank’s proposal, Bloomberg reported Wednesday, which would be a key step in eventually removing the asset cap imposed on the bank in Feb. 2018.
Wells Fargo is limited to the balance sheet size it had in late 2017, at $1.95 trillion, a rare penalty in the banking world enacted by the Fed after the bank’s multitude of scandals tied to internal controls.
That asset cap has been a key reason that Wells Fargo, under its current CEO Charlie Scharf, has underperformed rivals, who have been more able to take advantage of opportunities during the pandemic.
This story is developing. Please check back for updates.
