FDIC Rejects Citi's "Living Will" Plan

In a recent decision made in Thursday (June 20), U.S. banking regulators have rejected Citigroup's "living will," a comprehensive strategy designed to outline how the bank would wind itself down in the event of a catastrophic failure.

According to The Financial Times, the Federal Deposit Insurance Corporation (FDIC) held a closed-door meeting where the majority of its five-member board voted against Citigroup's plan, citing deficiencies in the bank's data controls.

The FDIC's decision heightens concerns over Citigroup's capability to be resolved safely, particularly focusing on the bank's data governance efforts. Despite these concerns, a spokesperson for the FDIC declined to comment on the matter when contacted by Reuters.

In response, Citigroup emphasized its ongoing efforts to modernize its infrastructure. "We continue to make substantial investments to modernize our infrastructure, including the work we're doing to automate data and regulatory reporting processes," the bank stated.

Citigroup reassured stakeholders about its financial health, stating, "Our balance sheet and financial health remains strong, with high levels of capital, liquidity, and reserves. We continue to have confidence that Citi could be resolved without the use of taxpayer funds or an adverse impact on the financial system."

This rejection comes amidst Citigroup's prolonged struggle to address regulatory concerns regarding its data management. In February, Citigroup received new directives to address these issues in late 2023 FY.