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FDIC questions Citi management review: report
October 9, 2009 / 4:36 AM / 8 years ago

FDIC questions Citi management review: report

(Reuters) - The U.S. Federal Deposit Insurance Corp is questioning the positive conclusions given to Citigroup Inc’s management team in a government-mandated review in the aftermath of the financial crisis, the Wall Street Journal said, citing people familiar with the situation.

Men travel on an escalator near a Citibank signboard in Tokyo June 26, 2009. REUTERS/Kim Kyung-Hoon

The report said some FDIC officials were questioning the rigor of the report, based partly on interviews of Citi’s executives who rated the effectiveness of their colleagues.

The FDIC did not immediately reply to a Reuters email seeking comment that was sent outside regular U.S. business hours.

While the findings still are being reviewed, the skeptical reaction could cause the FDIC to give the report little weight during the next regulatory assessment of the New York firm’s management.

Management skill is one of the factors used by regulators to determine financial-health ratings of U.S. banks. Such ratings help determine whether banks will be kept on an unusually tight regulatory leash.

The review had positive conclusions about Citi’s top management but was less favorable about two key members of Chief Executive Vikram Pandit’s team -- Vice Chairman Lewis Kaden and Chief Administrative Officer Don Callahan, a person familiar with the matter told Reuters on Wednesday.

The FDIC required the bank to hire an outside firm to perform its review and the board selected consultant Egon Zehnder International.

FDIC Chairman Sheila Bair has been a prominent critic of Citigroup’s business practices and governance. The announcement last week that Bank of America Corp Chief Executive Ken Lewis was on the way out heightened speculation that Pandit could suffer the same fate.

Reporting by Ajay Kamalakaran in Bangalore; Editing by Valerie Lee

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