Citigroup dressed-down by Japanese FSA again
TOKYO – Citigroup has been chastened by the Japanese Financial Services Agency yet again, after a series of processing failures at the firm's Japanese branch.
The failures included a breakdown in the transaction processing system of the consumer bank division. When the payment and receipt transactions for May 3 through May 8 should have been processed at the time of automatic batch processing performed at night after business hours on Monday, May 8, the payment and receipt transactions for May 2 were processed redundantly by failure, and customers' transactions for May 3 through May 8 were unrecorded or undisplayed. This caused confusion and problems in customer account transactions, settlement, and so on. The system failure affected approximately 97,000 customers and approximately 100,000 accounts.
The regulator issued a statement in July indicating that, "In order to develop an oversight and control framework for system development and operation, data processing and related operations at Citibank, NA, Japan Branches (hereinafter referred to as ''the branches''), the branches' current system of governance, internal control and outsourced (or subcontracted) operations (including adequate staffing and the construction of a proper organisation and structure) must be fundamentally reevaluated and redeveloped".
The regulator is demanding an improvement programme be implemented with regular reporting to the supervisor on progress.
The regulator wrote, "Given the branches and outsourcee's response to the series of system failures and management's level of involvement, it is difficult to assume that voluntary actions of the branches alone would bring in necessary improvements".
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@risk.net
More on Regulation
Capital neutrality key to completing Basel III, says Quarles
Former Republican Fed vice-chair thinks Hill or Bowman could help revive stalled prudential rules
Review of 2024: as markets took a breather, firms switched focus
In the absence of major crises and rules deadlines, financial firms revamped strategy, services and practices
Dora flood pitches banks against vendors
Firms ask vendors for late addendums sometimes unrelated to resiliency, requiring renegotiation
Swiss report fingers Finma on Credit Suisse capital ratio
Parliament says bank would have breached minimum requirements in 2022 without regulatory filter
‘It’s not EU’: Do government bond spreads spell eurozone break-up?
Divergence between EGB yields is in the EU’s make-up; only a shared risk architecture can reunite them
CFTC weighs third-party risk rules for CCPs
Clearing houses could be required to formally identify and monitor critical vendors
Why there is no fence in effective regulatory relationships
A chief risk officer and former bank supervisor says regulators and regulated are on the same side
Snap! Derivatives reports decouple after Emir Refit shake-up
Counterparties find new rules have led to worse data quality, threatening regulators’ oversight of systemic risk