Case Study Of Wachovia

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It is important to mention that the acquisition of Wachovia allowed Wells Fargo to reach more customers from the East Coast by providing a large retail banking network. As per Robert K. Steel, former President and CEO of Wachovia Corp, stated back in 2008, this agreement “creates one of the strongest financial firms in the world” and it was well received by all Wachovia stakeholders (The New York Times, 2008).

WFC’s Risk Management
In order to know the level of risk of an investment in WFC, it is crucial to determine its systematic and unsystematic risk. This analysis will assist to consider the options of an investment portfolio.

Systematic risk
Investors and financial scholars describe the systematic risk – also known and non-diversifiable risk- as the component of an investment that is totally related to the return from the market (Hull, 2015, p. 8). In other words, it depends on the conditions of the market, which is affected by the inflation rate, exchange rate, interest rate and economy growth rate (Atrill, 2014, p. 215).

After the Big Recession of 2009, Wells Fargo & Co. adopted, as part of its financial strategies, more controlled policies of investment. Nowadays, it has acquired higher quality assets of Residential Real Estate run - off loans which have resulted in
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Geoffrey Lipcombe and Keith Pond cite, in their book The Business of Banking (2002, p. 126), the Robinson v. Midland Bank Limited case (1925) which resulted as watershed for the banking industry in which the court stipulated the compulsory requirement of an explicit authorisation of the accountholder to open any account. Based on this, Wells Fargo’s investigation objective was to reinforce its good governance, resulting on the decision of its board of directors to hold executives accountable for this issue. In addition, the organisation has extended the investigation by reviewing customers’ account of 2009 and 2010 (‘board-and-company-actions.pdf’, no date, p.
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