Fed Okays 'Significant' Citi Expansion

The Federal Reserve Board has given Citigroup the green light to make "significant" acquisitions, saying the financial services giant has improved its compliance risk management program.A year ago the Fed ordered Citigroup "not to undertake significant expansion" because of concerns about its compliance program. A March 3 letter written by William Rutledge, executive vice president of the Federal Reserve Bank of New York, said Citigroup has made "significant progress" in implementing a new compliance risk management program. The 2005 order cited "deficiencies" in the bank's program, noting "a series of adverse compliance events in recent years." On Monday, New York-based Cerberus Capital announced that it was buying 51% of GMAC with two partners -- Citigroup and Japan's Aozora Bank.