Wells Fargo& Co. said it has increased staffing in its recovery andresolution planning personnel office based on FDIC and Federal Reserve Boardfeedback that foundthree deficiencies in the company's 2015 resolution plan.
The document, also known as a living will, details how WellsFargo and its subsidiaries would sale or wind-down in case the company were todeclare bankruptcy. In the public portion of its 2016 submission, the companydetails how it will rectify these regulatory concerns, which include resolutiongovernance, operational matters and legal entity rationalization.
Wells Fargo was one of five banks whose plan was found to be"not credible" in April. If the regulators determine it has notadequately addressed these deficiencies, Wells Fargo could face strictercapital and liquidity requirements or restrictions on its growth.
Wells Fargo plans on enhancing executive and seniormanagement oversight of resolution planning, and it has created a formalcommittee to better document resolution plan procedures. It also said itsinternal audit committee has been expanded to better gauge the company'sadherence to regulatory guidelines.
The company said it has taken measures to improve itsexecution of the bridge strategy, a procedure that relies on bridge banks tocomplete a certain number of regional portfolio sales in order to shrink thefranchise under the resolution plan. It also said it has identified thetechnology necessary to maintain critical services, and that it has analyzedeach portfolio to better define assets in case of sale.
Wells Fargo has also established a working group forday-to-day alignment of legal entities and business lines to improve thecompany's resolvability.
If the company did require an orderly resolution, it said ithas created an "event-driven legal entity assessment decision tree, whichdescribes the process to assess proposed business events that could potentiallymodify the company's legal entity organizational structure."