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Abstract

In September 2004, Federal Services Agency (FSA), the financial regulatory body of Japan, announced the closure of Citigroup''s private banking business in Japan starting from 30 September, 2005 onwards. Independent investigations conducted by FSA revealed major violations of law by the private banking unit. It was involved in activities which were permitted to be performed only by securities companies and not banking companies. The case details the irregularities in Citigroup''s Japanese operations and highlights the importance of good governance. It also examines the measures taken by Citigroup to fix these problems and analyses the efficacy of these measures. The case is structured to enable the students to understand and appreciate: (1) the importance of good governance in a financial services company: (2) the need for proper internal control measures and transparency in the dealings of a financial firm; (3) need for co-ordination and close supervision of the foreign operations by a global financial services organisation; (4) the importance of maintaining corporate integrity without succumbing to the temptation of short term benefits; and (5) study the role of regulatory agencies in Japan. The case is aimed at MBA/PGDBA level students and is intended to be part of the ethics and corporate governance curriculum.
Location:
Industry:
Size:
Very large
Other setting(s):
2001-2004

About

Abstract

In September 2004, Federal Services Agency (FSA), the financial regulatory body of Japan, announced the closure of Citigroup''s private banking business in Japan starting from 30 September, 2005 onwards. Independent investigations conducted by FSA revealed major violations of law by the private banking unit. It was involved in activities which were permitted to be performed only by securities companies and not banking companies. The case details the irregularities in Citigroup''s Japanese operations and highlights the importance of good governance. It also examines the measures taken by Citigroup to fix these problems and analyses the efficacy of these measures. The case is structured to enable the students to understand and appreciate: (1) the importance of good governance in a financial services company: (2) the need for proper internal control measures and transparency in the dealings of a financial firm; (3) need for co-ordination and close supervision of the foreign operations by a global financial services organisation; (4) the importance of maintaining corporate integrity without succumbing to the temptation of short term benefits; and (5) study the role of regulatory agencies in Japan. The case is aimed at MBA/PGDBA level students and is intended to be part of the ethics and corporate governance curriculum.

Settings

Location:
Industry:
Size:
Very large
Other setting(s):
2001-2004

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