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Report: Regulators warn Wells Fargo after ‘stress test’

In contrast to the glowing appraisal the bank just received from investor Warren Buffett, Wells Fargo has reportedly been told by federal regulators that it doesn’t have enough cash to withstand one of its “stress tests.”

The Associated Press is reporting this afternoon that “two people familiar with the matter” say Wells Fargo has been told it needs to shore up its finances to ensure it can withstand a deeper recession.

The Obama administration has been modeling what would happened to the 19 largest financial firms under various “what-if” scenarios, including 10.3 percent unemployment and a 22 percent drop in home prices over two years.

Wells Fargo, which is based in San Francisco but is one of Minnesota’s largest employers, did not immediately respond to a request for comment from the AP. The government is expected to release results of the stress tests on Thursday afternoon.

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