France raps Citigroup for bad deal

France's treasury has rebuked and penalised Citigroup Inc, saying the bank's controversial $16 billion bond trade in August tarnished European markets.

    The billion dollar transaction impacted Citigroup's prospects

    "Citigroup created havoc in European government bond markets," said Bertrand de Mazieres, the chief executive of the French Treasury on Monday.

    "We told Citigroup that they had tarnished the image of European government bond markets and that this was regrettable."

    The comments are the first public show of displeasure from a European treasury at Citigroup's actions, and the first concrete sign that the matter has impacted the bank's business prospects.

    The trade prompted the French Treasury to lower Citigroup's position in its league table of primary debt dealers.

    "Citigroup isn't at the level of the primary dealers ranking it should have been due to the August trading," Treasury Deputy Chief Executive Benoit Coeure said.

    On-going investigation

    Several European regulators are investigating Citigroup's 2 August rapid-fire sale of $16 billion of bonds on a range of electronic trading platforms.

    The bank bought back $4.9 billion in bonds half an hour later.

    German regulators say the bank also bought bond futures before the cash trade.

    The Frankfurt state prosecutor is assessing whether six Citigroup employees involved in the trade are guilty of manipulating the market. 

    SOURCE: Agencies


    YOU MIGHT ALSO LIKE

    'We scoured for days without sleeping, just clothes on our backs'

    'We scoured for days without sleeping, just clothes on our backs'

    The Philippines’ Typhoon Haiyan was the strongest storm ever to make landfall. Five years on, we revisit this story.

    How Moscow lost Riyadh in 1938

    How Moscow lost Riyadh in 1938

    Russian-Saudi relations could be very different today, if Stalin hadn't killed the Soviet ambassador to Saudi Arabia.

    Daughters of al-Shabab

    Daughters of al-Shabab

    What draws Kenyan women to join al-Shabab and what challenges are they facing when they return to their communities?