Bank crisis and recovery

 

Bank	Crisis Period & Nature	Stock Crash	Turnaround Driver	Recovery & Returns	Key Learnings
Wells Fargo (U.S.)	(2016–2020) Fake accounts scandal, CEO resignation, $3B fine.	$60 → $22 (−63%)	CEO Charlie Scharf (ex-JPMorgan) focused on governance cleanup.	$22 → $60 (≈3x in 4 yrs)	Retail trust can return if culture + controls are rebuilt.
JPMorgan Chase (U.S.)	(Early 2000s, merger & risk scandal from derivatives exposure, “London Whale” 2012 loss)	$65 → $32 (−50%)	Jamie Dimon restored discipline, fortress balance sheet, strong risk management.	Became top global bank, $32 → $200+	Culture, risk management, and leadership credibility define premium valuation.
Bank of America	(2008–2011) Countrywide & Merrill Lynch acquisitions; mortgage fraud, massive losses.	$55 → $5 (−90%)	CEO Brian Moynihan rebuilt capital, shed toxic assets, stabilized business.	$5 → $45 (≈9x in 10 yrs)	Balance sheet cleanup and capital rebuilding restore long-term confidence.
Citigroup	(2008 crisis & earlier frauds, recurring leadership turmoil)	$550 → $10 (split-adjusted)	Rebuilt under Vikram Pandit, then Michael Corbat, now Jane Fraser.	Partial recovery only	Cultural repair incomplete; franchise remains undervalued.
Standard Chartered (UK/Asia)	(2013–2016) Money-laundering violations, compliance issues, overexposure to risky EMs.	£19 → £4.5 (−75%)	CEO Bill Winters (ex-JPMorgan) restructured business, cut costs.	£4.5 → £8 (≈2x)	Emerging market focus needs strong compliance systems to regain trust.
Deutsche Bank (Germany)	(2010s–2019) Libor manipulation, money laundering, weak capital ratios.	€100 → €6 (−94%)	CEO Christian Sewing restored capital, exited investment banking exposure.	€6 → €14 (≈2.3x)	Credibility still rebuilding, but shows early signs of turnaround.

Bank	Crisis Low (Approx.)	Time to Double	3-Year Return	5-Year Return	Catalyst / Leadership
Wells Fargo	$22 (2020 COVID + scandal low)	~10 months ($45 by 2021)	~2.5× ($22→$55 by 2023)	~3× ($22→$65 by 2025)	CEO Charlie Scharf; governance rebuild
JPMorgan Chase	$32 (2009 crisis low)	~11 months ($64 by 2010)	~2.5× ($32→$80 by 2012)	~6× ($32→$190 by 2014)	Jamie Dimon’s “fortress balance sheet” era
Bank of America	$5 (2011)	~14 months ($10 by 2012)	~3.5× ($5→$18 by 2014)	~9× ($5→$45 by 2019)	Brian Moynihan rebuilt capital, cost discipline
Standard Chartered	£4.5 (2016)	~18 months (£9 by 2018)	~2×	~2.3×	CEO Bill Winters stabilized EM franchise
Deutsche Bank	€6 (2019)	~24 months (€12 by 2021)	~2.3×	~2.5×	Christian Sewing restored capital & focus

The Great Railway Mania (1843–1847)

📍 Background

• Britain’s first major speculative boom in industrial equities.

• The trigger: 1843–1844 saw real success stories (Great Western, Midland, London & Birmingham).

• Parliament approved over 1,000 railway companies and projects during the boom.

• Many were paper companies with no track built — funded via deposits and leverage.

• Between 1843–1846, the market capitalization of railway shares quadrupled.