CitiGroup Building in United Kingdom (England)
The Bank of England fined Citigroup a record breaking £43.9 million pounds, or $57 million dollars.
Announced to the public on November 26, the fine is a result of Citigroup’s failure to comply with PRA regulations. The ‘PRA’ is the Bank of England’s Prudential Regulation Authority.
According to a press release available on the Bank of England website, the wrongdoing occurred between 2014 and 2018. The organization also outlined several examples of how exactly Citigroup did not meet regulatory requirements.
The news of Citigroup fined by Bank of England came as a shock to both analysts and the public. However, the global investment bank has agreed to make necessary changes to meet the PRA’s standards.
Citigroup fined by Bank of England over failure to meet a number of regulatory requirements
According to the official press release, the Bank of England gave six reasons outlining how Citigroup failed to meet regulations.
One reason was that Citi “failed to ensure that systems and controls supporting its UK regulatory reporting framework were designed, implemented, and operating effectively.”
Additionally, Citi did not “allocate adequate human resources to ensure that Citigroup Global Markets Limited’s liquidity returns were complete and accurate.”
Citigroup also had issues with documentation and control frameworks. Additionally, the PRA cited the company’s below-standard “oversight and governance” related to reporting.
Citigroup agrees to fix reporting issues; gets a fine reduction
Citigroup’s fine of £43.9 million sets an all time record for fines by the Bank of England.
This number is actually a reduced figure from the original £62.7 million the firm was originally fined. According to reports, Citigroup struck a deal and was able to reduce the original amount by 30%. To get this reduction, the company agreed to fix all of the problems mentioned in the PRA’s report.
In a statement about the issue, Citigroup said, “Citi has fully remediated the past regulatory reporting issues identified by the PRA and settled this matter at the earliest possible opportunity.”
Citigroup’s failure a bigger concern for oversight and investors
The company’s gross misstep and failure to meet PRA standards resulted in Citigroup fined by Bank of England. Not only that, but it portrayed an inaccurate picture of the institution’s capital and liquidity positions. This is not only misleading for regulators, like the PRA, but it misleads investors as well. It will definitely take some time for Citigroup to rebuild trust with the public and organizations they conduct business with.
The Deputy Governor for the PRA, Sam Woods, said in a statement, “Accurate regulatory returns from firms are vital for the PRA in fulfilling our role. Citi failed to deliver accurate returns and failed to meet the standards of governance and oversight of regulatory reporting which we expect of a systemically important bank.”