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US regulators pressure Citi to hire external consultants

Source: PTI
August 13, 2009 14:10 IST
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Citibank logoUS regulators have pressed Citigroup to hire external consultants to look at whether its current management can lead the banking major out of the economic crisis, a move which will put more pressure on its top executives, says a media report.

"US regulators have forced Citigroup to hire external consultants to consider whether its current management is up to the job of leading the troubled bank out of the financial crisis, in a decision that intensifies pressure on its top executives and board," UK daily The Financial Times said.

The push for Citi to enlist external help, is led by the Federal Deposit Insurance Corporation and backed by other regulators, underlines authorities' desire to keep Citi's upper echelons on a tight leash after rescuing bank with $45 billion, the report noted.

It also raises questions about the long-term future of Vikram Pandit, Citi's chief executive who is under fire from the FDIC, and other senior executives, it added.

Attributing to people close to the situation, the FT said Citi had retained Egon Zehnder, a headhunter and board advisory consultancy, to carry out an in-depth management review requested by government after stress tests on banks.

The report also said Citi has to present a plan about possible managerial changes to board and regulators by the time it reports third-quarter results in October. The US bank has added eight new directors and replaced its finance chief in recent months.

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