ON HER way out, Janet Yellen, who stood down as the Federal Reserve’s chair on February 2nd, paused to add yet another sanction to those already imposed on Wells Fargo for foisting unwanted insurance and banking products on clients. The latest punishment is a highly unusual one. Wells will be blocked from adding assets to the $2trn held on its balance-sheet at the end of 2017. Two other regulators had already imposed fines and penalties soon after the shenanigans began emerging in 2016. The bank has gone through a big reorganisation. The Fed’s belated response presumably took into account not only the errant conduct but also the political fallout. The government, as well as the bank, had been embarrassed.

At first glance, Wells is an odd target for such treatment. During the financial crisis it proved itself the best of the big banks, with relatively high underwriting standards and manageable losses. The scandal was huge—millions of clients were pushed into unwanted products. But the financial costs were small and the bank’s contrition (and readiness to pay compensation) high.

On the other hand, its malfeasance was blatant, which is rare in finance. Also, it was able to bear tough sanctions. And the Fed needed to make a statement about the sharpness of its regulatory steel. In doing so, it has made Wells, not long ago the model of a well-run bank, a model for experimental punishment.

One aspect of the bank’s punishment (although the bank plausibly denies this formed part of the agreement with the Fed) involves managerial change. The Fed’s announcement noted that four Wells directors will leave by the end of 2018.

A purge of directors had long been urged by the bank’s critics, such as Senator Elizabeth Warren. The board has already seen heavy turnover and nearly 6,000 employees have been laid off, including a former chief executive, John Stumpf, and the head of the division where most of the transgressions took place. Other departures continue quietly; the long-serving head of risk announced his resignation last month. The Fed is keen to avoid the impression given by past efforts to punish banks—such as levying fines—that the perpetrators of misdeeds had been spared and that shareholders had borne the cost. Wells’s travails are sending a blunt warning to directors at other banks.

The explicit component of the sanctions, the cap on growth, will continue for at least 60 days, while a new risk plan is drawn up for the Fed. After that it will stay in place for an open-ended period, subject to reviews. Unable to expand its balance-sheet, Wells will be unable to take advantage of a growing economy that seems likely to crave credit and investment. Instead, to maintain returns, it may well be forced into gruelling cost cuts.

Wells reckons that its profits in 2018 will drop by less than $400m—just a blip compared with the $22bn it made in 2017. But the market seemed to differ. The Fed’s announcement came just before the weekend. When trading reopened on February 5th, Wells’s share price dropped by 9%, slashing $30bn from its valuation, a bad result even on a terrible day for the stockmarket more broadly.

This suggests that the largest constraints on Wells’s future activities may be behavioural. The bank says it can continue to serve its customers and maintain returns. But its priorities will surely lie in not getting into any more trouble. The only area in which it is likely to embark on a hiring spree will be in regulatory compliance, where it has already added more than 2,000 people in the past two years. Since the crisis, banks have not needed an excuse to be bureaucratic or timid. In Wells’s case, it may find it has little choice.