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Citigroup fined $236 million for data management failures – London Business News | Londonlovesbusiness.com
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U.S. banking regulators have imposed a $136 million fine on Citigroup due to unresolved data management issues identified in 2020.
This sanction was announced by the Federal Reserve, highlighting Citi’s insufficient efforts to implement adequate risk controls.
The joint action of the Federal Reserve and the Office of the Comptroller of the Currency (OCC) underscores the severity of the persistent deficiencies in the financial entity.
This fine represents a significant challenge for Jane Fraser, Citigroup’s CEO. Fraser has been resolving regulatory failures and streamlining the bank’s structure.
In 2020, Citigroup had already faced a $400 million fine for risk management and internal controls deficiencies. Despite the correction plans, the Fed found that the bank’s progress had been insufficient.
The Office of the Comptroller of the Currency now requires Citigroup to implement a quarterly process to ensure sufficient resources are dedicated to meeting regulatory milestones.
Fraser acknowledged the setbacks and stated that the bank would intensify its transformation efforts, although she warned that progress would not be linear. This shows a renewed commitment by the bank to address its deficiencies.
In February, regulators asked Citigroup for urgent changes in measuring the risk of default of its business partners and in internal supervision. These changes are crucial to improving the bank’s operational stability and integrity. Additionally, the Federal Deposit Insurance Corporation expressed concern over Citigroup’s plans for a living will in case of bankruptcy, adding another layer of complexity to the bank’s regulatory challenges.
In conclusion, banking regulators’ $136 million fine to Citigroup underscores the urgent need for more robust data management and risk controls. Despite CEO Jane Fraser’s efforts to improve the bank’s operations, Citigroup must significantly intensify its efforts to meet regulatory expectations, restore confidence in its ability to manage risks, and adequately oversee its internal operations.