newyorker | In case there was any doubt about Elizabeth Warren’s feelings toward John Stumpf, the C.E.O. of Wells Fargo, it was cleared up on Tuesday during a hearing before the Senate Banking Committee. “Okay, so you haven’t resigned, you haven’t returned a single nickel of your personal earnings, you haven’t fired a single senior executive,” Warren said to Stumpf, during an interaction that might properly be characterized as a verbal evisceration. “Instead, evidently, your definition of ‘accountable’ is to push the blame to your low-level employees who don’t have the money for a fancy P.R. firm to defend themselves.”
Warren kept going, articulating a very pointed attack on the head of the company. She estimated that Stumpf’s stock holdings had increased by two hundred million dollars in value during the time that “this scam,” as Warren put it, occurred, in which fifty-three hundred employees opened unauthorized customer bank accounts in order to meet sales targets. “You should resign,“ she finally said. “You should be criminally investigated by both the Department of Justice and the Securities and Exchange Commission.”
The banker was ostensibly there to defend his company’s handling of the falsified accounts, which were first reported in detail in 2013, but which became major news after the Consumer Financial Protection Bureau fined the bank a hundred and eighty-five million dollars, earlier this month. At the same time, though, the episode seemed designed to remind the public that, almost exactly eight years after the collapse of Lehman Brothers and one of the worst financial crises in history, very little about the unrestrained, incentive-driven banking culture that caused so many problems has changed.
Wall Street has always been bonus-driven; the amount of money an employee receives in January or February each year is seen as a direct reflection of a person’s worth. Even the staid retail portion of the industry—checking, savings, mortgage, and credit-card accounts–came to mimic the culture of Wall Street trading firms. Dozens of regulatory investigations since the crisis have shown that this high-stakes incentive culture that works so well to motivate employees to push and take risks has no apparent mechanism in place to moderate bad decisions.