US regulators are reportedly dissatisfied with the advancements made by the world's largest bank, Citigroup, in the two years since it was criticized for having subpar risk management procedures.
According to the Wall Street Journal, Federal Reserve officials allegedly questioned Citigroup CEO Jane Fraser about the lender's intentions to strengthen its risk-management system.
According to sources, regulators have become impatient with the bank's lack of progress and have warned the board that failure to rectify the situation might result in penalties from the Office of the Comptroller of the Currency.
This week, Citigroup is anticipated to provide authorities with a new strategy, which is anticipated to include a number of action points that authorities may use to assess the bank's development.
A regulatory reaction, though, is not anticipated for a few months.
A representative for Citigroup stated in a statement: "We have taken decisive actions to simplify our firm and we will continue to act with urgency to modernise the bank for the digital age and strengthen our risk and control environment."
They said, "We are completely committed to the sustainability of this effort and to executing at the level expected of us."
The US Fed and OCC penalized the bank $400M in October 2020 for "significant ongoing deficiencies" in its risk management procedures. The bank was asked by the regulators to make a number of changes to its structure.
While Citigroup employs more than 230,000 people worldwide, teams responsible for its risk management have lately hired 30,000 personnel.
By fLEXI tEAM