Wells Fargo Tempted to Cut Pricing After Tax Overhaul, CFO Says

The transcript discusses the potential impact of tax reform on lending practices, focusing on interest rates and competition among banks. Analyst Chris Kotowski raises questions about how tax changes might affect loan yields and whether borrowers will benefit from lower interest rates. The conversation explores how different banks might respond to these changes, with some potentially offering pricing concessions to maintain competitiveness. The discussion also touches on the variability in competitive behavior and the implications for return on equity, as well as the dynamics of loan cycles over the coming years.

What is one potential effect of tax reform on lending rates?

• Increase in interest rates

• Decrease in interest rates

• No change in interest rates

• Interest rates will fluctuate randomly

How might banks use tax reform to gain a competitive edge?

• By increasing loan amounts

• By offering pricing concessions

• By reducing customer service

• By closing branches

What is a possible long-term effect of tax reform on banks' return on equity?

• It will remain unchanged

• It will increase

• It will decrease significantly

• It will become unpredictable

How might banks that are not first movers respond to tax reform?

• By increasing fees

• By waiting to see how competition unfolds

• By exiting the market

• By immediately lowering interest rates

What is a challenge banks face in maintaining competitive returns post-tax reform?

• Lack of customer interest

• Increased regulatory scrutiny

• Balancing pricing concessions with profitability

• Decreasing loan demand