FDIC calls for reshuffle of Citigroup's top brass

Attributing it to people familiar with the matter, The Wall Street Journal said, “The Federal Deposit Insurance Corp is pushing for a shake-up of Citigroup Inc’s top management, imperiling Chief Executive Vikram Pandit.” The FDIC, under Chairman Sheila Bair, also recently “pressed a fellow regulator to lower the Government’s confidential ranking of Citi’s health — a change that would let regulators control the firm more tightly,” the report said.
FDIC is a Government regulatory body which insures bank deposits and acts as a receiver for collapsed banks among many other responsibilities.

Regulators clash

The  report said FDIC’s willingness to take an increasingly tough position toward Citi is setting up a bitter clash between regulators — some of whom disagree with the FDIC’s position — and between the FDIC and Citigroup, whose officials have argued that “Bair is overstepping her authority.”

“The FDIC is our tertiary regulator,” after the Office of the Comptroller of the Currency and the Federal Reserve, the WSJ report said quoting Citigroup Chief Financial Officer Ned Kelly.
The Wall Street Journal noted that Citigroup has taken steps to shrink itself and clean up its financial mess. Last month, the bank had performed better than expected on the Federal Reserve’s “stress test” of top banks’ strength.

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