Citigroup Breaches Safety Rules, Makes Reporting Errors

Bank Working to Fix Compliance Issues Linked to Rules That Protect Customer Deposits

World's Leading Banking Group Working to Resolve Breaches in Three Areas

NEW YORK, July 31 (Reuters) - Citigroup has repeatedly violated a U.S. Federal Reserve rule that limits intercompany transactions. The bank has also made errors in liquidity reporting and has not been in compliance with regulations that protect customers' insured deposits. Citigroup is working to fix these and other compliance issues, according to a report in Reuters.

The activities in question are organized around three areas: intercompany transactions, liquidity reporting and protection of insured deposits. The Federal Reserve's Regulation W limits the amount of money that banks can borrow from each other. Citigroup repeatedly breached this regulation, according to the Reuters report.

The bank also made errors in reporting its liquidity to the Federal Reserve. Liquidity is the amount of cash or cash equivalents that a bank has on hand to meet its obligations. The Federal Reserve requires banks to report their liquidity levels on a regular basis. Citigroup's reporting errors could have led to the bank being seen as having more liquidity than it actually had.

Finally, Citigroup was found to be in violation of regulations that protect customers' insured deposits. The Federal Deposit Insurance Corporation (FDIC) insures deposits up to $250,000 for each customer. Citigroup's compliance issues with the FDIC could have put customer deposits at risk.

Citigroup is working to address the compliance issues that were identified by the Federal Reserve and the FDIC. The bank has hired a new compliance officer and has put into place new procedures to ensure that its operations comply with all applicable regulations.