Citigroup's PR disaster in Japan

This is exactly what Citigroup doesn't need right now: Japan's financial regulator has essentially banned the bank from the retail market for a month after uncovering deficient controls related to money laundering. The bank was ordered to revamp its governance, controls and management structure. It cannot advertise during the ban, which will start July 15, according to the Financial Times.

This is embarrassing on several fronts. CEO Vikram Pandit has been touting the bank's international strength as of late, suggesting it as a point of differentiation from other big banks. This makes it look like a novice. Recall that Citigroup was forced to shut down its Japanese private banking business in 2004 after it was accused of all sorts of regulatory lapses. Citigroup is downsizing in Japan, but it still needs to prove it's a seasoned international company. 

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