Banking is a black box. There is very little transparency, especially with extremely large banks.
Wells Fargo’s annual report, for example, shows roughly $300 billion in “commercial and industrial loans”.
That’s it. That’s all the detail we get. (It’s not just Wells Fargo, by the way. Every mega-bank maintains the same lack of transparency.)
We have no idea if they took depositor’s funds and floated a billion dollar loan to a failing business that’s about to go under.
Or if they have been making no-money-down loans to people with terrible credit.
No one knows anything about the inner workings of such an enormous bank… until it all hits the fan like it did in 2008.
And how could anyone know? When something becomes that big, that complex, with hundreds of thousands of employees and thousands of branches, it’s impossible to keep track of it all.