Wells Fargo Bankruptcy May Negatively Affect the Financial Markets, U.S. Regulators Say

by San Antonio Attorney

Wells Fargo might negatively affect the financial markets if the bank was forced into bankruptcy, according to United States regulators.  This was the finding of regulators after conducting another review of the under the new rules in the industry.

The country’s biggest financial institutions have to submit ‘living wills’ that state how they would be wind down in a systematic manner.

Wells Fargo, along with other four banks, failed the first assessment last April.

On Dec. 13, regulators concluded that Wells Fargo’s proposal was inadequate and that it would be penalized, according to statement by the Federal Deposit Insurance Corporation.

To be specific, the bank may not set up overseas bank entities or obtain non-bank units, the FDIC ordered.  Wells Fargo can submit a revised living will until March 31 and government regulators may remove the limitations then.

There are four other banks that fail the fist evaluation of living wills in April 2016.

Those are Bank of America, JPMorgan Chase, Bank of New York Mellon and State Street Corp.

In very rare situations, creditors can force a debtor into bankruptcy.  This is called an involuntary bankruptcy, and it seldom happens.

It is important for a company or individual who needs debt relief to look at their options.  A San Antonio Chapter 7 Attorney can determine which one will work best for certain situations.

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