FedFin Analysis: Strategic Impact of Wells Fargo’s Sanctions
In our 2017 analysis of the FRB’s proposed standards for BHC boards governance (see Client Report CORPGOV23), we noted that the proposal holds directors to higher account despite criticism at the time that it relaxed them. As former Chair Yellen noted in her letter to Sen. Warren (D-MA) in concert with the FRB’s Friday action against Wells Fargo, the guidance plans tougher standards, but it is striking that the Board not only did not wait for finalization before deploying them, but also made a point of placing the blame very publicly on both past and current directors as well as the former CEO. Some have speculated that this was a parting shot from Chair Yellen, but press coverage indicated that Chairman Powell led the negotiating team and senior staff wanted to go still farther.