Shares of Citigroup (C) have dropped 4.5% in after-hours trading after the Federal Reserve rejected its capital plans.
Agence France-Presse/Getty Images The Fed explains why it said no to Citigroup:
The Federal Reserve's objection to Citigroup's CCAR 2014 capital plan in part reflects significantly heightened supervisory expectations for the largest and most complex BHCs in all aspects of capital planning. While Citigroup has made considerable progress in improving its general risk-management and control practices over the past several years, its 2014 capital plan reflected a number of deficiencies in its capital planning practices, including in some areas that had been previously identified by supervisors as requiring attention, but for which there was not sufficient improvement.
Practices with specific deficiencies included Citigroup's ability to project revenue and losses under a stressful scenario for material parts of the firm's global operations, and its ability to develop scenarios for its internal stress tests that adequately reflect and stress its full range of business activities and exposures. Taken in isolation, each of these deficiencies would not be deemed critical enough to warrant an objection, but, when viewed together, they raise sufficient concerns regarding the overall reliability of Citigroup’s capital planning process to warrant an objection to capital plans and require a resubmission.
Morgan Stanley (MS), JPMorgan Chase (JPM) and Bank of America (BAC) had their capital plans approved. Morgan Stanley has gained 0.6%, JPMorgan Chase has dropped 0.8% and Bank of America has dropped 0.8%.
No comments:
Post a Comment