More questions for Wells Fargo after exam rating leak
By Kate Berry
The leak of confidential supervisory information about Wells Fargo’s examination rating is fueling speculation that further regulatory action may soon be taken against the San Francisco megabank and raising renewed questions about its regulator’s oversight. A recent report said that the management component of Wells’ Camels rating — one of the most subjective parts of the test — had been downgraded to 3 in mid-2017, a warning shot to management indicating ongoing supervisory concerns or weakness. …Karen Shaw Petrou, managing partner at Federal Financial Analytics, said the situation is another reminder of why Camels ratings shouldn’t be confidential information. If they were public, banks would have more incentives to avoid a bad rating. It would also put more pressure on regulators. “The bank has been subject to a series of leaked information about its demonstrably significant problems, all of them embarrassing,” said Petrou. “Camels ratings should be publicly disclosed, because if [a key part of] Wells’ Camels rating was downgraded last year, the question is, why only then? Because I think regulators should be held accountable.”