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
Illiquid assets pricing still needs expert judgement, say banks
EU regulators want more transparency in valuations, but some asset prices remain elusive
Fed to move tailored-capital goalposts soon, says Bowman
Banks hope agencies will index triggers for harsher capital rules to economic growth
Will SEC reporting proposal supercharge alt data providers?
Move that would allow companies to opt out of quarterly reporting disclosures welcomed
EU lawmaker calls for review of Luxembourg’s cross-border rules
Grand Duchy accused of side-stepping rules aimed at prising away banking business from London
Un-American or un-JPM? Surcharge rethink divides G-Sibs
Some see sense in rethink to funding indicator, others call for a backtrack
Bank of England softens tone on CCP cross-product margining
Breeden supports margin efficiencies to encourage more repo clearing, but still warns on leverage
UK securitisation reforms trump EU’s, say market players
Originators and investors could find UK securitised assets easier to deal with after tandem reviews
Europe’s next chore: cleaning a floor made messy by the US
Rejection of Basel III’s output floor leaves EU with some difficult decisions to make