Citigroup cited as lone large, complex bank with ‘shortcoming’ in its 2021 living will

A “shortcoming” was identified in the resolution plan (or “living will”) for Citigroup, Inc. – related to data the firm manages — based on results of a review of the 2021 wills, according to statements released Wednesday by two federal banking regulators.

Citigroup was the only one of the eight largest and most complex domestic banking organizations in the country to have a shortcoming identified in its living will, the Federal Reserve and the Federal Deposit Insurance Corp. (FDIC) said.

The agencies said the letter they sent to Citigroup about the issue in its living will describes a shortcoming related to data quality and data management concerns, which the Fed noted has been previously identified in its October 2020 enforcement action against the company.

The Fed and FDIC said that a plan to address the shortcoming is due to the agencies by January 31, 2023.

According to the agencies, a shortcoming is a weakness that raises questions about the feasibility of its living will, which could result in additional requirements if not corrected. It is not as severe as a deficiency, the agencies noted. In Citigroup’s resolution plan, the agencies found a shortcoming related to data quality and data management concerns previously identified by the Board in its October 2020 enforcement action.

Two years ago, the agencies cited shortcomings in the resolution plans of six other large, complex banking companies – including Citigroup. Other companies’ plans cited were those of Bank of America Corp., The Bank of New York Mellon Corp, Morgan Stanley, State Street Corp., and Wells Fargo & Co. The regulators said those shortcomings were related to “the ability of each firm to reliably produce, in stressed conditions, data needed to execute its resolution strategy.”

The agencies said the 2021 living wills of the firms addressed that issue.

Large, complex banking companies that are subject to the living will review are bank holding companies that have either total consolidated assets of at least $250 billion, or between $100 billion and $250 billion that have been designated by the Federal Reserve to be subject to the resolution planning requirement.

Agencies announce results of resolution plan review for largest and most complex domestic banks