((Automated translation by Reuters, please see disclaimer https://bit.ly/rtrsauto))
Issues with Citigroup CN’s “living will,” which details how the bank would be liquidated in the event of bankruptcy, are manageable but could be troublesome for its executives, according to JPMorgan.
Citi is one of four banks that the U.S. Federal Reserve and the Federal Deposit Insurance Corp have found to be non-compliant due to deficiencies related to their derivatives portfolios.
“We expect this will require more work by lawyers, consultants and management and will increase expenses, but we believe the impact should be manageable,” JPMorgan said.
“This adds to the list of issues management needs to focus on,” the brokerage said, noting reports of setbacks Citi is facing due to its consent orders and a recent lawsuit filed by a former chief executive who claims she was fired for opposing what she says were attempts to provide false information to regulators.
Citi said the lawsuit was “meritless” and vowed to “vigorously defend against it.”
The bank has been battling problems related to the management of its data for years. Last week, it told investors it was automating processes and improving data reporting to respond to orders from regulators.
Citi declined to comment and reiterated its statement from last week, in which it was fully committed to resolving the issues identified by regulators.
