Wells Fargo loses world's most valuable bank tag after fake account fiasco

US bank Wells Fargo has lost its title as the largest banking institution in the world by market capitalisation, after billions of dollars were wiped off the company's value following its fake account fiasco.

The San Francisco-based bank was caught up in a scandal last week as it was found by regulators to have created accounts for unknowing customers in order to meet sales targets.

Somewhere close to $9bn has been struck off Wells' market capitalisation since the news of the scandal first came out.

Overnight, shares in Wells Fargo dropped a further 3.3%, taking its market cap to $236bn, falling below JPMorgan Chase for the first time since 2013.

The company said it will take measures to address the fallout from the scandal, after the dismissal of 5,300 employees and a hefty $185m fine.

Investors are unlikely to take the news well, with reports saying that Berkshire Hathaway boss Warren Buffett is set to lose to $2bn as one of the bank's biggest shareholders.

Critics have been weighing in to signal disapproval of the malpractice from Wells, with Treasury secretary Jack Lew the latest to condemn the bank.

"If they [regulators] weren’t there, this would still be going on," he told a conference on Tuesday. "This ought to be a moment where people stop and remember how dangerous the system can be if you don’t have protections in place."