Chief Executive Officer of Wells Fargo & Co. Charlie Scharf said that the limitation of the assets of the Federal Reserve System is currently not a factor of significant influence on the process of activity of the financial institution he heads, but suggests that the situation will change in the future.

On Tuesday, December 5, during a speech at the Goldman Sachs financial services conference in the United States, Mr. Scharf stated that the limitation of nowadays is not a kind of force of influence on his bank due to trends observed in the sphere of deposits. He also noted that the current state of affairs is partly due to the level of demand for loans.

Wells Fargo is the fourth largest organization in the American banking sector. This financial institution found itself in a difficult situation after the Fed issued an order in 2017 to limit the size of this lender. The regulator has decided on the duration of this measure of influence for more than five years.

The Fed has limited the size of the bank due to a series of scandals related to fake accounts opened at Wells Fargo. This problem became known in the public space in 2017. The heads of the financial institution in the format of private communication suggest that the restriction on the lender will be lifted in 2025.

Media outlets, citing insiders, report that representatives of the Wells Fargo board initially expected that the impact measure imposed by the Fed would be less prolonged. The restriction also caused losses to the financial institution. The lender found itself in an extremely unpleasant situation when it had to count its losses against the background of the successes of other representatives of the banking sector. Wells Fargo missed out on multibillion-dollar revenue during a period of increasing competitors’ balance sheets by trillions.

Currently, the market capitalization of a financial institution is approximately half of the amount that was fixed on the day the restrictive measure began.

Mr. Scharf took over Wells Fargo four years ago. He does not predict the time frame for lifting the restriction. At the same time, Charlie Scharf has repeatedly stated in this context that regulatory work is his top priority, but everything depends on the Fed’s decision. The financial regulator refrains from commenting on this issue.

Charlie Scharf, during a speech at the mentioned conference, also stated that the economic system of the United States turned out to be stronger than expected. In this case, it means that the economy has demonstrated impressive resilience against the background of several modern challenges that are not conducive to its development and prosperity. Mr. Scharf noted that the dynamic of consumer spending in the United States is stable, despite discussions of possible policy options for financial authorities regarding interest rates and potential downturns.

Wells Fargo predicts that by the end of the fourth quarter of this year, losses will be recorded in its portfolio of office loans. Also, the financial institution does not expect its indicators to improve next year. This was stated by Charlie Scharf. He also described the current attitude of the financial institution he heads towards the future as conservatively restrained.

As we have reported earlier, Former CEO Sues Wells Fargo.