From today’s New York Times:
On a Thursday evening in mid-January, a group of top Wells Fargo executives sat down for dinner in an upscale surf-and-turf restaurant near the White House. At nearby tables, power brokers ate seafood on ice and sipped cocktails out of copper mugs.
The Wells Fargo executives — including the chief executive, Timothy J. Sloan, and the finance chief, John R. Shrewsberry — enjoyed their crab legs, but they were in Washington on unpleasant business. The Federal Reserve planned to impose tough sanctions on the San Francisco-based bank for years of misconduct and the shoddy governance that allowed it.
The executives’ mission, according to three people directly involved in the negotiations, was to avoid further shaking investor confidence in the bank and its management team.
Officials at the central bank had a different goal, according to people familiar with their thinking. They wanted to send a message to the Wells board that it would be held responsible for the company’s behavior.
After three weeks of frenzied negotiations, a deal was announced on Friday night that represented a milestone in the evolving relationship between regulators and banks. Wells Fargo, one of the country’s largest banks, was banned from getting bigger until it can convince regulators that it has cleaned up its act.
Read the complete article here.