Beautiful Virgin Islands

Wednesday, Jul 23, 2025

Citigroup Fined $400m for ‘Serious' Deficiencies in Risk Management

Citigroup Fined $400m for ‘Serious' Deficiencies in Risk Management

US regulators fined Citigroup Inc. $400 million and ordered the nation’s third-largest bank to fix its risk-management systems, citing “significant ongoing deficiencies.”
In a consent order agreed to by the New York bank’s board, the Federal Reserve faulted Citigroup for falling short in “various areas of risk management and internal controls” including data management, regulatory reporting and capital planning. The Office of the Comptroller of the Currency, in a separate consent order, said the fine was punishment for the bank’s “longstanding failure” to remedy problems in its risk and data systems.

The Wall Street Journal earlier reported that the Fed and the OCC were planning to reprimand Citigroup for failing to improve its risk-management systems—an expansive set of technology and procedures designed to detect problematic transactions, risky trades and anything else that could harm the bank.

“We are disappointed that we have fallen short of our regulators’ expectations, and we are fully committed to thoroughly addressing the issues identified in the Consent Orders,” the bank said. “Citi has significant remediation projects under way to strengthen our controls, infrastructure and governance.”

The public rebuke marks a major escalation of regulators’ efforts to get Citigroup to fix its risk systems. For years, the Fed and the OCC have privately pushed Citigroup Chief Executive Michael Corbat to give priority to an overhaul of the systems. Their decision to issue consent orders requiring the changes indicates the pressure they were exerting behind the scenes wasn’t enough.

The reprimand, in the works for several months, accelerated planning for Mr. Corbat’s retirement. Mr. Corbat, who said last month that he would step down in February, felt the expensive, multiyear overhaul was best left in the hands of his successor, Jane Fraser, the Journal previously reported.

The punishment, while substantial, is gentler than the rebuke Wells Fargo & Co. got for weaknesses in its risk-management systems brought to light by its 2016 fake-account scandal. The OCC in early 2018 fined the bank more than $1 billion, and the Fed imposed an unprecedented growth cap on the bank.

At issue at Citigroup is the infrastructure underpinning its systems meant to identify risk and protect customer data.

Many of Citigroup’s various businesses, for example, run on their own independent systems that have their own methods for tracking customers and transactions. There are hundreds of identification systems inside the bank. A customer doing business with multiple parts of the bank could have different identification codes for each one.

Regulators have long fretted that the hodgepodge of systems, a legacy of a string of deals in the 1990s that turned Citigroup into a financial powerhouse, could make the bank vulnerable to costly and potentially damaging missteps. A recent high-profile error—Citigroup’s accidental $900 million payment to creditors of cosmetics company Revlon Inc.—gave credence to their concerns.

The consent orders from the OCC and Fed leave Citigroup with a lengthy to-do list. The regulators ordered the bank to form a new board committee to oversee the risk overhaul and to develop plans for holding management accountable.
Newsletter

Related Articles

Beautiful Virgin Islands
0:00
0:00
Close
US Treasury Secretary Calls for Institutional Review of Federal Reserve Amid AI‑Driven Growth Expectations
UK Government Considers Dropping Demand for Apple Encryption Backdoor
Severe Flooding in South Korea Claims Lives Amid Ongoing Rescue Operations
Japanese Man Discovers Family Connection Through DNA Testing After Decades of Separation
Russia Signals Openness to Ukraine Peace Talks Amid Escalating Drone Warfare
Switzerland Implements Ban on Mammography Screening
Japanese Prime Minister Vows to Stay After Coalition Loses Upper House Majority
Pogacar Extends Dominance with Stage Fifteen Triumph at Tour de France
CEO Resigns Amid Controversy Over Relationship with HR Executive
Man Dies After Being Pulled Into MRI Machine Due to Metal Chain in New York Clinic
NVIDIA Achieves $4 Trillion Valuation Amid AI Demand
US Revokes Visas of Brazilian Corrupted Judges Amid Fake Bolsonaro Investigation
U.S. Congress Approves Rescissions Act Cutting Federal Funding for NPR and PBS
North Korea Restricts Foreign Tourist Access to New Seaside Resort
Brazil's Supreme Court Imposes Radical Restrictions on Former President Bolsonaro
Centrist Criticism of von der Leyen Resurfaces as she Survives EU Confidence Vote
Judge Criticizes DOJ Over Secrecy in Dropping Charges Against Gang Leader
Apple Closes $16.5 Billion Tax Dispute With Ireland
Von der Leyen Faces Setback Over €2 Trillion EU Budget Proposal
UK and Germany Collaborate on Global Military Equipment Sales
Trump Plans Over 10% Tariffs on African and Caribbean Nations
Flying Taxi CEO Reclaims Billionaire Status After Stock Surge
Epstein Files Deepen Republican Party Divide
Zuckerberg Faces $8 Billion Privacy Lawsuit From Meta Shareholders
FIFA Pressured to Rethink World Cup Calendar Due to Climate Change
SpaceX Nears $400 Billion Valuation With New Share Sale
Microsoft, US Lab to Use AI for Faster Nuclear Plant Licensing
Trump Walks Back Talk of Firing Fed Chair Jerome Powell
Zelensky Reshuffles Cabinet to Win Support at Home and in Washington
"Can You Hit Moscow?" Trump Asked Zelensky To Make Putin "Feel The Pain"
Irish Tech Worker Detained 100 days by US Authorities for Overstaying Visa
Dimon Warns on Fed Independence as Trump Administration Eyes Powell’s Succession
Church of England Removes 1991 Sexuality Guidelines from Clergy Selection
Superman Franchise Achieves Success with Latest Release
Hungary's Viktor Orban Rejects Agreements on Illegal Migration
Jeff Bezos Considers Purchasing Condé Nast as a Wedding Gift
Ghislaine Maxwell Says She’s Ready to Testify Before Congress on Epstein’s Criminal Empire
Bal des Pompiers: A Celebration of Community and Firefighter Culture in France
FBI Chief Kash Patel Denies Resignation Speculations Amid Epstein List Controversy
Air India Pilot’s Mental Health Records Under Scrutiny
Google Secures Windsurf AI Coding Team in $2.4 Billion Licence Deal
Jamie Dimon Warns Europe Is Losing Global Competitiveness and Flags Market Complacency
South African Police Minister Suspended Amid Organised Crime Allegations
Nvidia CEO Claims Chinese Military Reluctance to Use US AI Technology
Hong Kong Advances Digital Asset Strategy to Address Economic Challenges
Australia Rules Out Pre‑commitment of Troops, Reinforces Defence Posture Amid US‑China Tensions
Martha Wells Says Humanity Still Far from True Artificial Intelligence
Nvidia Becomes World’s First Four‑Trillion‑Dollar Company Amid AI Boom
U.S. Resumes Deportations to Third Countries After Supreme Court Ruling
Excavation Begins at Site of Mass Grave for Children at Former Irish Institution
×