Citigroup, formed in 1998 with the $70 billion merger of Citicorp and Travelers Insurance, has been granted one extra year to comply with banking requirements that require the company to divest itself of certain entities. The Federal Reserve, which originally signed off on the deal, says that the remaining “nonconforming activities represent less than 2 percent of [Citigroup’s] total assets.” The deadline had been set for Oct. 8, 2000.
When Citigroup originally formed in 1998, most everything about it was impermissible in terms of the integration of financial services entities. However, the passage of Gramm-Leach-Bliley has meant the company largely conforms with current law. “Most of the activities or investments that were impermissible when Travelers consummated its acquisition of Citicorp are now permissible due to Citigroup’s election to become a financial holding company…on March 13, 2000,” the Fed said.
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