Additionally, although all TARP money has been repaid by the group in the table above, Citigroup was on the hook for the most TARP money and asset guarantees for nonperforming loans. So there might be some residual concern about whether Citigroup could deliver acceptable results in the event of another catastrophic event mimicked by the stress tests given its history of poor performance in the financial crisis of 2008.

Also complicating matters is the most recent $400 million loan fraud in Citigroup's Banamex unit in Mexico, which highlights the difficulty in managing risk in foreign countries. Althogh the Federal Reserve did not mention this incident in its report, it goes to the heart of what concerns regulators in their comments cited above.

Although, I am sure no one will ever admit it, relations between regulators and Citigroup's previous management did not go smoothly. They were harshly criticized from as early as 2009 for taking inordinate risk (bad loans) and complicated banking operations of the "supermarket" banking model that nearly led to Citi's collapse.

This criticism, along with the rejection of Citi's capital plan last year, led to the resignation of former CEO Vikram Pandit.

Several analysts have said that they were "shocked" by the rejection to return excess capital to shareholders.

Citigroup is overcoming a large stigma from their recent past, however, and it's clear management needs to mends fences and do a better job guiding its regulators on risk assessment on all of its operations, including expansive global operations.

See article on money center stock values: "Make Some Bank on Bank of America"

At the time of publication, the author held shares of BAC, C and WFC.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

Gene Kirsch, independent senior banking analyst,, has more than 20 years of financial industry experience in credit-risk portfolio management, lending and loan review analysis within various sized, regional credit unions, finance companies and banks at both the retail and commercial level. He has led a major independent ratings firm's bank and credit union ratings division of over 14,000 institutional ratings and developed the methodology for global bank and credit union ratings. He has numerous published articles, quotes in various national publications and appeared in several media interviews. He holds a Bachelor of Science in Management Information Systems and Finance from the State University of New York at Buffalo and a minor in Psychology with continued educated in commercial banking with various institutions in Florida and North Carolina.

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