Citigroup‘s new chief administrative officer, Karen Peetz, made her first public appearance earlier this month at Bank of America‘s Future of Financials Conference. Peetz joined Citigroup in June and is tasked with overseeing the bank’s project management office and its regulatory engagement globally. She will likely play a big role in helping Citi correct some of its regulatory woes with internal controls that recently led regulators to issue multiple consent orders.
While there is still little detail about how much the corrective actions will cost or how long the process will take, I think some of Peetz’s comments are worth a second look.
One good sign and one bad sign
In October, regulators hit Citigroup with multiple but related consent orders that included a $400 million fine for deficiencies with the bank‘s internal controls related to compliance, data, and risk management. Some of the deficiencies date back to 2013 and 2015, but it probably didn’t help that earlier this year, Citigroup accidentally wired $900 million to several Revlon creditors as a result of what the bank called a “clerical error” and “out-of-date” software. Then CEO Michael Corbat announced his retirement sooner than expected, and the consent orders came shortly after. Since all of this happened, investors have been trying to figure out not only how Citigroup plans to address all of these problems, but also how deep the issues go.
