Citigroup has been pressed by US regulators to make “urgent changes” to the way it assesses the default risk of its trading partners, according to a report by Reuters, citing an anonymous source and an email involving the bank’s internal audit unit.
According to the source, the Federal Reserve issued three notices to Citi in late 2023, ordering the bank to improve its methodology for measuring the risk of default by counterparties in derivative transactions. Reuters said the email the news agency was shown revealed that an internal audit in December found Citi’s risk management improvements across the bank inadequate and lacking in procedures to ensure comprehensive risk reporting to its board and senior management.
