U.S. banking regulators have fined Citigroup $400 million for failing to correct “serious and longstanding deficiencies” in its risk-management systems.

Citigroup agreed to the fine as part of a settlement with the Office of the Comptroller of the Currency that also requires it to “take broad and comprehensive corrective actions to improve risk management, data governance, and internal controls.”

The bank also entered into a similar consent order with the Federal Reserve that said it had “not adequately remediated the longstanding enterprise-wide risk management and controls deficiencies” previously identified by the Fed.

The OCC cited deficiencies in Citigroup’s enterprise-wide risk management and compliance risk management programs, saying it failed to “adequately identify, measure, monitor, and control risk.”

“The public rebuke marks a major escalation of regulators’ efforts to get Citigroup to fix its risk systems,” The Wall Street Journal said, noting that for years, the Fed and the OCC have privately pushed the bank to “give priority to an overhaul of the systems.”

“Their decision to issue consent orders requiring the changes indicates the pressure they were exerting behind the scenes wasn’t enough,” the WSJ added.

In August, Citigroup mistakenly paid $900 million to Revlon lenders who had sued the cosmetics company — an error that heightened concerns over its risk-management systems, which are a legacy of a string of deals in the 1990s that turned it into a financial powerhouse.

The bank said in a statement that it was disappointed to have fallen short of regulatory expectations and has “significant remediation projects” under way.

According to the Journal, “The risk-management overhaul is expected to be an expensive undertaking. Chief Financial Officer Mark Mason has said the bank would spend $1 billion on the work this year alone.”

Under the consent order with the Fed, the Citigroup board has 120 days to submit a plan describing how it will hold senior managers accountable for executing effective and sustainable remediation plans and ensure they fix the risk-management problems.

Jane Fraser, currently president and CEO of Global Consumer Banking, will succeed Michael Corbat as CEO in February.

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