How the Fed’s asset cap changed Wells Fargo
Lender has expanded repo book and cut cash since Q4 2017
On April 8, the Federal Reserve temporarily eased an asset cap imposed on Wells Fargo so it could make additional loans to coronavirus-ravaged small businesses.
The cap, introduced in February 2018, restricts Wells Fargo to a $1.95 trillion balance sheet. In response, the San Francisco-based bank has changed its asset mix, getting rid of excess cash while ramping up its reverse repo operations.
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