The biggest bank in the US is miffed at the Federal Reserve
CEO John Stumpf isn't all that keen on the idea.
"I don't think that's something we really needed," Stumpf said in an interview with CNBC December 1 with Kayla Tausche.
"It's what we've been asked to do. I think that we have enough capital the way it is, but if loss absorbing capital is required through debt, we're going to raise it. We will be able to manage it. But I can't tell you sitting here that I thought that was necessary."
The Fed regulation on 'total loss-absorbing capacity' means banks must have cash on hand to cover writing off 18% or more of 'risk-weighted' assets in the event of a loss. That means Wells Fargo will have to add billions to its balance sheet in cash reserves.
Stumpf isn't the first Wells Fargo executive to sound off on the Federal Reserve's latest requirement, which is particularly onerous for the biggest bank in the US by market capitalization. Last month, Wells Fargo CFO John Shrewsberry called the bank "victims" of the Fed's new rule.
Stumpf was quick to point out that Wells Fargo and other firms have already shored up cash reserves.
"The industry has more than doubled its capital [reserves]," he told Tausche. "We surely have in the last seven years."
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