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 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.
Citigroup has said it is taking steps to address regulators’ concerns, among them, a planned overhaul of its risk systems. The expected regulatory rebuke accelerated planning for Chief Executive Michael Corbat’s retirement, the Journal previously reported. Mr. Corbat felt the expensive, multiyear overhaul was best left in the hands of his successor, Jane Fraser, the Journal reported.
“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 in a statement. “Citi has significant remediation projects underway to strengthen our controls, infrastructure and governance.”