Delivering Alpha 2021
Delivering Alpha virtual summit will take place on September 29, 2021
Delivering Alpha 2021

Treasury Sec. Lew says financial system is dangerous if you don't have protections in place

Wells Fargo is a wake up call: Jack Lew

Cases like Wells Fargo's creation of phony accounts for customers highlight the need for strong banking regulation, Treasury Secretary Jack Lew said Tuesday.

Speaking at the 2016 Delivering Alpha conference, Lew declined comment on specifics about the Wells Fargo case.

"This ought to be a moment where people stop and remember how dangerous the system is when you don't have the proper protections in place," Lew said. "This is a wake-up call and should remind all of us that culture and compensation make a difference. How you reward people, how you motivate people and what values you hold people to matters."

The conference is hosted by CNBC and Institutional Investor.

The Wells Fargo case came to light late last week when the bank agreed to pay a $185 million fine for what regulators called "widespread illegal" sales practices.

While the bank fired more than 5,000 employees, no one has been charged. The person overseeing the bank division in question is entitled to about $95 million in stocks and options accumulated over her career after she retires at the end of the year, according to a Wells Fargo proxy statement.

Lew said no one should be "too big to jail."

"The pattern of behavior that we've seen here is something that needs to stop," he said. "It is not acceptable to do things that are designed to increase either individual or firm bottom lines by deceiving customers or passing along charges that are either invisible or they don't know about."

In addition to declining comment about the specifics of the Wells Fargo case, he also passed on providing input for the current presidential race.

"I have not dissected any of the campaign proposals. I'm not doing politics in my current life," he said.

Correction: This story was revised to correct that the head of the community banking division will retire at the end of the year, according to Wells Fargo. It also was revised to provide a lower value of her stock and options, based on a Wells Fargo proxy statement.