Last year, Citigroup mistakenly credited a client's account with $81 trillion instead of $280, an error that briefly went unnoticed before being caught 90 minutes later, as reported by The New York Times.
The bank called it a "near miss" and reported the incident to regulators. This blunder adds to Citi's troubled history with risk management. In 2022, a trader's mistake erased €300 billion from European stocks, leading to a £62 million fine. In 2020, the bank accidentally wired $900 million to Revlon's lenders and was later fined $400 million for failing to address internal control issues.
Despite CEO Jane Fraser prioritizing risk improvements, regulators fined Citi $136 million in 2023 for slow progress on data management fixes. Citi defended its response, stating, "our detective controls promptly identified the inputting error" and reversed it before funds moved. However, repeated missteps continue to raise concerns about the bank's internal controls and regulatory compliance.
In a "Dear CEO" letter sent to the heads of international banks earlier this year, the UK Prudential Regulation Authority (PRA) argued that it is the board's responsibility to ensure a firm's culture is supportive of desired risk management outcomes. "Boards should ... consider where risk culture may be the root cause of material weaknesses in their firm's control environment," the PRA's Rebecca Jackson and Alison Scott wrote therein.
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