Wells Fargo Unleashes Pent-Up Power in Crucial Repo Market

When Wells Fargo & Co. was finally freed last year from a US‑imposed cap on its assets, the bank went looking for places to deploy its pent‑up financial power. Much of it flowed into overnight repurchase agreements— the repo market — just as the broader financial system was looking for another deep‑pocketed player.

Since the cap came off, Wells Fargo has pushed more than $200 billion into this key piece of the financial system’s plumbing, which links money‑market funds, dealers and Treasuries. Regulators have been warning about strains in this market, and in June — the same month Wells Fargo was ...