The Financial Times reports weaknesses in auditing contributed to Citigroup’s failing the Federal Reserve capital assessments, according to executives and others familiar with the matter, adding to fears that there are material lapses in controls at the sprawling US bank.
Citi executives are vowing to improve auditing and anti-money laundering processes as well as their forecasts for revenues and losses in the Fed’s stress scenario to try to assuage the concerns that led regulators to veto the bank’s plan to return more cash to shareholders.
But there is also simmering tension among the bank’s management, a feature that preceded Mike Corbat’s installation as chief executive in 2012 but which has become more stark since, according to insiders.
One senior executive said that Corbat had shown himself to be 'overconfident' that he had repaired the bank’s rickety relationship with regulators and had 'mistaken a ‘not bad’ relationship for a good relationship'.
Another said earlier this week that Corbat was 'in a difficult place' and facing 'unhappy staff, shareholders and some people who are both – like myself'.
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