US banking regulators have toughened their scrutiny of Citigroup Inc, becoming involved in internal discussions about the company's strategic direction and discouraging executives from pursuing certain acquisitions, the Wall Street Journal said, citing people familiar with the matter.
As part of the scrutiny, Citigroup's two main regulators, the Federal Reserve and Office of the Comptroller of the Currency (OCC), expect to essentially have veto power over key strategic decisions at the firm, the people told the paper.
Regulators such as the Federal Deposit Insurance Corp. have approached Citigroup to gauge its interest in buying troubled banks, hoping the move would strengthen Citigroup's liquidity by providing it with new deposits, the paper said.
In other instances, the government has told Citigroup to back away from deals that seemed overly ambitious, the Journal said.
“We always maintain close relationships with our regulators,” a Citigroup spokeswoman told the paper, declining to comment further.
Citigroup could not be immediately reached for comment by Reuters.
The Fed and OCC haven't imposed formal orders restricting Citigroup's operations, the Journal said, citing people familiar with the matter. (Reuters)