Japanese financial regulators ordered CitiGroup to stop marketing its products. Reuters reported:
The Financial Services Agency said Citi had not developed adequate systems to detect suspicious transactions such as money laundering, the same violation that prompted the regulator to shut down Citigroup's private banking business in 2004.
One might expect five years a sufficient time to make change.
Was Citi too busy with financial innovation to meet the basics?Its head of retail banking in Japan, Darren Buckley, made a public bow of apology, the traditional sign of remorse employed by Japanese executives, repeating the gesture made by Citi's then-CEO Charles Prince five years ago.
"Our controls need strengthening," Buckley said at a news conference, adding the bank had failed to properly institute changes following the 2004 punishment.
The FSA said the lack of compliance showed Citigroup executives "... lack an understanding of the rules applied in Japan, such as laws and regulations, and an awareness of improvement."Citi isn't alone. Wall Street ignored quality in packaging investment junk. Besides Japan, Citi has U.S. quality issues. The bank temporarily suspended mortgage applications from brokers due to inadequate quality control on appraisals and income verification.
America's hallowed halls of government and corporate board rooms haven't a clue regarding improvement, as taught by Dr. W. Edwards Deming. For that America experiences heavy losses.
