© Reuters. Citigroup (C) shares dip on report of new Fed demands to fix risk control
Citigroup (C) shares are down Monday after reports stated U.S. regulators have asked the bank for urgent changes regarding its process for measuring the default risk of its trading partners.
In addition, Reuters stated that the bank’s own auditors feel a plan to improve internal oversight is lacking. These developments could impact Citi’s turnaround plans.
Citi shares are down 1.5% at $53.21 at the time of writing. The stock opened Monday’s session at $53.57.
Reuters said its sources told them that in late 2023, the Federal Reserve sent three notices to Citi asking the bank to address how it measures the risk of default by counterparties in derivative transactions in the coming months.
Furthermore, an email seen by the publication shows that Citi’s internal audit unit believes more work is needed to address problems previously raised by regulators. According to the email, the audit unit found some of the work conducted in order to improve risk management was inadequate.
The bank is also said to have failed to meet a requirement of having procedures in place to guarantee the board and senior management receive extensive reports about risks across the company.