Wells Fargo Ranks No. 1 in Hard-to-Value Assets, S&P Says - Bloomberg

Wells Fargo Ranks No. 1 in Hard-to-Value Assets, S&P Says - Bloomberg


“Level 3 asset values use inputs that are unobservable and are often based on internal modeling,” S&P analysts including Stuart Plesser wrote. “Because they are the most subjective, and least liquid, of the three types of assets, we believe they carry the most risk relative to others in the portfolio.”
Securities portfolios of the largest lenders drew scrutiny after New York-based JPMorgan reported losses of at least $5.8 billion from trades in credit derivatives at the firm’s chief investment office. The portfolios have helped the biggest U.S. banks reap profits amid weak economic growth and new regulations that encourage the buildup of assets that can be sold easily, the ratings firm said.