Is the world's biggest bank too big? That seems to be the question as we watch Citigroup lurching from one governance problem to the next.
Certainly was the view expressed to me last night over dinner with an ex-Citigroup executive as we discussed the latest instalment on Citibank Japan's woes. "It's become too unwieldy,'' he said. Unfortunately, he didn't want to go on the record.
The topic for discussion was the biggest financial house in the Japanese market receiving a severe reprimand over a computer glitch that botched nearly 275,000 transactions in May. Some transactions were double-booked, others were processed but not reflected in statements.
The regulator, the Financial Services Agency, has ordered Citibank Japan to reevaluate and redevelop its current system of governance, internal control and outsourcing, and to submit a business improvement plan by August 14, and then file quarterly reports starting in December outlining progress on the plan.
For its part, Citibank Japan says it will try and fix the problem. "Citibank Japan regrets these issues and again apologizes to customers and all parties concerned,'' the bank said in a statement.
The problem for Citigroup is that the computer metdown followed a series of disasters in Japan.
Earlier this year, the regulator accused the company's trust banking unit of misleading inspectors with misinformation and violating accounting rules, and last year, the regulator there pulled Citigroup's private banking license and charged it with legal violations, claiming it failed to implement safeguards against money laundering and misled customers about financial risks.
All this coincides with Citigroup's governance headaches in Australia where the world's biggest bank is being sued for insider trading, something I have blogged on extensively.
Thank you for all the comments, good, bad and indifferent.For those of you whom I upset I am very sorry. It has now been about a year and things are moving along, yes I have had some, alot of therapy, this hit me hard but we are moving on. I have 2 attorneys dealing with this. I admitt that I had alot to learn and I have learned that we really don’t matter to corporate America it really is just about profits. My fight is not just for me but for all those wrongfully treated by corporate America. I didn’t realize that all caps was so offensive, sorry to that one. Life is all about learning and this was a very hard lesson for us. Again, sorry if I offended anyone I am getting better now. As far as the manager goes, he will just have to live with what he has done and I wish him and his family the best hoping that no one ever treats them as he did us. God Bless Us All