© Reuters. Citi ordered by US regulators to overhaul risk management processes: report
Proactive Investors – Citigroup Inc (NYSE:) has been asked by US regulators to make “urgent changes” to the way it measures the default risk of its trading partners, according to an exclusive report by Reuters citing a source with direct knowledge of the matter.
The Federal Reserve last year sent Citi three notices ordering to address how it measures the risk of default by counterparties in derivative transactions, the source said.
Meanwhile, the company’s internal auditors believe work needs to be done to address problems raised in response to enforcement actions, called consent orders, from regulators that date back to October 2020, according to an email seen by Reuters.
Per the email, Citi’s internal audit unit found that work done to improve risk management across the business was “inadequate.”
It also found that the bank did not meet the requirement to have procedures in place to ensure that its senior management and board received comprehensive risk reports.
Meanwhile, a source told Reuters that Citi in September and October failed exams assessing whether the bank had made as…
