Regulators to Citigroup (C): 'We're Moving In'

The Wall Street Journal published an article this morning discussing the role federal regulators will now have at Citigroup (NYSE: C) following last month's government bailout of the embattled bank.

According to sources familiar with the matter, regulators are now holding a magnifying glass up to Citigroup's actions, becoming involved in internal discussions related to Citi's strategic direction. The WSJ article calls the increased level of oversight "the culmination of mounting regulatory concerns" regarding Citi's financial position, noting that the bank has already received about $45 billion worth of taxpayer capital infusions since the credit mess began.

As the government is now the largest shareholder of Citigroup, currently holding a 7.8% stake, the banks two main regulators -- the Federal Reserve and the Office of the Comptroller of the Currency -- expect to basically have veto power over key strategic decisions at the firm. Such decisions would include acquisitions, for example.

Shares of Citigroup are leading the financial sector lower today. The stock is currently down 3.7% to $7.92.

Citigroup Inc., doing business as Citi, provides a range of financial products and services to consumer and corporate customers in the United States and internationally.

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