In this report, we assess the decision announced late yesterday by the FRB and FDIC to reject Wells Fargo’s revised resolution plan.  Building on the warnings sent earlier this year (see Client Report LIVINGWILL13), Wells’ failure is startling given that the other GSIBs that then did not satisfy the agencies now have seen their plans  accepted.  Future reports will assess why this occurred for the approved plans; we here turn to the more immediate question of why Wells did not join them in escaping supervisory sanction.  This is the first instance in which resolution-plan lapses have been subject to express penalty.  Sen. Brown (D-OH) yesterday cited this as an example of why Dodd-Frank is proving an effective constraint on large banks, but it remains to be seen if Trump Administration and progressive critics are mollified by these sanctions or the significant GSIB restructuring evident in the now-approved plans.

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