Citigroup’s plans for expansion in China have encountered significant obstacles due to regulatory challenges from U.S. authorities. Bloomberg News reported that the Federal Reserve recently imposed penalties on the bank for issues related to data management and risk controls, complicating its efforts to establish a standalone securities firm in China.
The bank has been delayed in obtaining a crucial clearance letter from the U.S. Fed, which is necessary for Chinese regulators to proceed with the licensing process. This setback comes after Citigroup was fined a total of $136 million in July, exacerbating its difficulties in meeting China’s regulatory requirements.
Despite these challenges, Citigroup is actively engaging with China’s securities regulator and has no intention of withdrawing its application for the new business. According to sources familiar with the situation, discussions are ongoing, and developments could evolve.
While Citigroup did not provide specific comments regarding its licensing process in China, the bank reaffirmed its commitment to supporting clients within the country.
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