Wells Fargo Case Summary
Currency risk:
Finance committee should assess interest rate risk, market risk, and currency risk by using hedge derivatives. Wells Fargo recorded derivatives on balance sheet at fair value, and volume measured in terms of notional amount. Wells Fargo enters into cross-currency swaps, cross-currency interest rate swaps and forward contracts to hedge Wells Fargo’s foreign currency risk and interest rate risk associated with the insurance of non-U.S. dollar denominated long-term debt.
Likelihood of Events: ⅕ ; Magnitude of Event’s Consequences: ⅘ (see Exhibit 3)
Fraud Triangle:
One of the incentives was related to the compensation plans. The compensation plan for Wells Fargo is that branch bankers need to meet some threshold criteria to be
Finance committee should assess interest rate risk, market risk, and currency risk by using hedge derivatives. Wells Fargo recorded derivatives on balance sheet at fair value, and volume measured in terms of notional amount. Wells Fargo enters into cross-currency swaps, cross-currency interest rate swaps and forward contracts to hedge Wells Fargo’s foreign currency risk and interest rate risk associated with the insurance of non-U.S. dollar denominated long-term debt.
Likelihood of Events: ⅕ ; Magnitude of Event’s Consequences: ⅘ (see Exhibit 3)
Fraud Triangle:
One of the incentives was related to the compensation plans. The compensation plan for Wells Fargo is that branch bankers need to meet some threshold criteria to be