Wells Fargo (NYSE: WFC) management has been dealing with a ton of regulatory issues ever since the top-tier bank's phony-accounts scandal came to light in 2016. The most consequential of all these regulatory issues has been the asset cap the Federal Reserve placed on the bank in early 2018, which essentially prevents the bank from growing its balance sheet. Banks have lots of regulatory capital requirements, but a big ratio that regulators watch closely is the common equity tier 1 (CET1) capital ratio, which is a measure of a bank's core capital expressed as a percentage of risk-weighted assets.
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