Podcast Summary: Unhedged x Behind the Money — Can Wells Fargo Make It in Investment Banking?
Podcast: Unhedged
Special Feature: Behind the Money (Financial Times & Pushkin)
Date: February 17, 2026
Host: Mikaela Tindera
Guests: Akilah Quino (FT US banking correspondent), Josh Franklin (FT US banking editor)
Overview
This episode explores Wells Fargo's bold effort to remake itself from a stalwart Main Street retail bank into a formidable force in investment banking. With backstory on Wells Fargo’s Main Street image, the shadow of its fake accounts scandal, and the recent lifting of a restrictive regulatory cap, the conversation probes whether the bank can credibly challenge Wall Street heavyweights like JP Morgan and Goldman Sachs — and what unique strengths and risks this transformation entails.
Major Discussion Points and Insights
1. Recent Megadeals: Setting the Stage
- Netflix’s Pursuit of Warner Brothers Discovery:
The turmoil in Hollywood M&A presents fertile ground for Wall Street, with Netflix and Paramount both vying for Warner Brothers Discovery.- Josh Franklin [01:11]: “You have three of the biggest names in Hollywood in Netflix, Paramount, Warner Brothers Discovery, and it's really going to be a deal that's going to settle what the entertainment industry looks like.”
- Wells Fargo's Role:
Wells Fargo committed to half of a $59 billion bridge loan to Netflix for the acquisition—its largest-ever financing. (Akilah Quino [01:46])
2. Wells Fargo’s Traditional Identity
- Founded in San Francisco during the Gold Rush, Wells Fargo prided itself on being the “folksy” American bank focused on everyday Main Street customers.
- Reputation as a dependable, humble institution, benefiting from “not being Wall Street.”
- Josh Franklin [05:16]: “Being a kind of Main Street bank wasn't just a part of identity for Wells Fargo, it was part of its selling point... being disassociated from [Wall Street] was actually seen as being a virtue.”
3. The Fake Accounts Scandal and Fallout
- Between 2002–2016, Wells Fargo employees created millions of fraudulent accounts under pressure to meet sales targets.
- Akilah Quino [06:44]: “They were found essentially to have inflated their growth by pressuring staff to move customers' money into unauthorized accounts...”
- The damage:
- Massive reputational harm, $8 billion in penalties and restitution.
- Most critically, a rare Federal Reserve asset cap, freezing Wells Fargo's ability to grow beyond $2 trillion in assets since 2017.
- Josh Franklin [07:50]: “It's extremely rare to see a bank limited in this way by regulators, especially a bank of this size…”
- Resulted in years of stagnation versus competitors like JP Morgan, whose profits dwarfed Wells Fargo’s by 2025.
- Josh Franklin [08:44]: “JP Morgan in the meantime, reported profits of 57 billion for 2025. So that just shows you how much more profitable other banks have become...”
4. A New Beginning: Regulatory Shackles Off
- In Summer 2025, the Fed lifted the asset cap after Wells Fargo addressed compliance issues.
- Charlie Scharf (CEO) [09:57]: “The only thing that's different is the perception of Wells Fargo, which is incredibly important because we've always been perceived as being in the penalty box...”
- Renewed ambitions: CEO Charlie Scharf, with Wall Street pedigree (ex-JP Morgan, Visa, BNY), leads a push into investment banking.
5. The Investment Banking Playbook
- Ambition:
Target to become a top-5 global investment bank (no set timeline). - Opportunities & Risks:
- Investment banking is high-stakes: expensive talent, risky lending, different cultural DNA than retail banking.
- Previous attempts by other banks (Credit Suisse, Deutsche Bank)—largely unsuccessful.
- Josh Franklin [02:28]: "There are cautionary tales, and if this goes south... could end up being an expensive mistake."
- Comparison to Goldman Sachs:
- Goldman failed to move from Wall Street into Main Street; now, Wells tries the reverse.
- Josh Franklin [13:44]: “What Wells is trying to do here is basically the mirror image of what Goldman Sachs tried to do... and that failed pretty spectacularly… so what Wells is trying to do is really the opposite...”
- Goldman failed to move from Wall Street into Main Street; now, Wells tries the reverse.
6. Competitive Advantages
- Leadership: Several top managers are ex-JP Morgan, bringing relevant expertise.
- Domestic advantage: US roots and status as top-3 US retail bank help in credibility and scale.
- Josh Franklin [13:51]: “A lot of ex JP Morgan people in there... JP Morgan is probably like the best example of a bank that's been able to be profitable both on Main Street and Wall Street.”
7. Wells Fargo’s Strategy in Practice
- Two approaches to breaking into investment banking:
- Brains: Become a trusted advisor for high-level financial ideas (Goldman’s style)
- Balance Sheet: Out-compete by providing massive financing (lending)
- Wells is pursuing a mixture, but the Netflix deal shows their emphasis on large-scale lending out of the gate.
- Josh Franklin [14:59]: “... in the Netflix deal, where they're really leading with the balance sheet first, that's a great way to show that you're serious about this effort...”
8. Timing and Regulatory Environment
- Booming market: 2025 was the best investment banking year since the pandemic, with anticipation of an ongoing “supercycle.”
- Regulatory tailwinds: Trump administration rolling back some post-2008 restrictions.
- Josh Franklin [16:10]: “...the environment actually couldn't be much better for what they're trying to do.”
9. Brand Challenges
- Can Wells Fargo maintain its Main Street brand while pushing deep into Wall Street businesses—or will the bank need to create distinct identities, as JP Morgan (investment) and Chase (retail) have done?
- Josh Franklin [17:15]: “It's not to say that they can't do it, it's just what you go to Wells Fargo for... do you go for a loan, or for cutting edge advice...?”
10. Progress Report
- 2025 was Wells Fargo’s best year in investment banking, with $3 billion+ in fees, ranking 7th globally.
- Advised on two of the year's largest deals:
- Netflix/Warner Brothers Discovery
- Union Pacific/Norfolk Southern railroad merger.
- Josh Franklin [18:06]: “It has really shown that it can be competitive, and now it's just a question of how high they can rise.”
11. Looking Ahead
- Key developments to watch:
- Continued participation in major deals, high-profile hires, and year-end M&A rankings ([19:12] Akilah Quino).
- Largest test: Whether Wells Fargo can win away longstanding clients from established rivals ([19:29] Josh Franklin).
Notable Quotes & Moments
- Akilah Quino [01:49]: “The bank claims it's the largest financing of its kind ever, and it really signals a significant shift in Wells Fargo's overall ambitions.”
- Josh Franklin [16:10]: “I think for someone like Wells Fargo that wants to grow, the environment actually couldn't be much better for what they're trying to do.”
- Josh Franklin [18:06]: “It's just outside the kind of big five that Charlie Scharff has talked about breaking into. But I think it's important to also caveat that with the fact that it's coming from a pretty modest base…”
Timestamps for Important Segments
- Wells Fargo's History and Brand: [04:26]–[06:06]
- Fake Account Scandal Recap: [06:33]–[08:39]
- Lifting of Asset Cap and New Strategy: [09:39]–[11:30]
- Ambition to Enter Investment Banking: [11:41]–[13:44]
- Risks and Comparisons to Other Banks’ Failures: [13:44]–[13:51]
- Wells Fargo’s Competitive Advantages: [13:51]–[14:46]
- Investment Banking Strategies (Brains vs. Balance Sheet): [14:59]–[15:51]
- Current Market Conditions & Regulatory Environment: [16:10]–[16:50]
- Brand Identity Challenges: [17:15]–[17:56]
- Performance and Deal Highlights: [18:06]–[19:02]
- What’s Next: [19:12]–[19:56]
Conclusion
Wells Fargo’s aspiration to transform into a top-tier investment bank is ambitious and fraught with peril — mirroring the failed ambitions of giants like Deutsche Bank and Credit Suisse. Yet, with strong leadership, deep pockets, and renewed regulatory freedom, it now competes seriously for major Wall Street business. Whether it can shake lingering reputational issues, reinvent its brand, and unseat entrenched rivals remains the million—and potentially billion—dollar question.