Citigroup Inc.

The Securities and Exchange Commission has sent subpoenas to major Wall Street banks seeking information about their dealings with Situational Awareness, the AI-focused hedge fund that nearly collapsed in late July. The subpoenas requested details on when the fund executed trades and how it communicated with lenders about borrowed capital, and banks were told to retain all records concerning the fund. Goldman Sachs, JPMorgan Chase, Citigroup, and Bank of America were named in the inquiry, according to a regulatory filing cited by The New York Times. Situational Awareness has not been accused of wrongdoing, and the SEC declined to comment, noting any investigation is at its earliest stages. The fund, founded two years ago by former OpenAI researcher Leopold Aschenbrenner, commanded roughly $45 billion at its July high point with up to 400% leverage before losing approximately $35 billion in assets after margin calls forced a distressed sale of its publicly traded holdings.

Wells Fargo and Citigroup have room under the national deposits cap to acquire a large regional bank, and five lenders fit the bill. The nation's third- and fourth-largest banks are the only megabanks not barred from such a deal, since JPMorgan Chase and Bank of America already exceed the 10% national deposit threshold. Analysts and bankers say the regulatory window is the most open since the financial crisis, and Wells Fargo CEO Charlie Scharf has signaled openness to a transformative deal, while Citigroup CEO Jane Fraser has emphasized organic growth. The five potential targets are Fifth Third, Huntington, Citizens, KeyCorp, and Regions, with Zions a specific fit for Wells Fargo and First Horizon for Citigroup. However, North America bank merger value fell by more than half to $30.1 billion in the first six months of 2026 compared to the year-earlier period, according to EY data, as rising profits and share prices make sellers reluctant.

Citi strategists say recent coordinated intervention by the United States and Japan signals an informal currency alliance linking foreign-exchange policy with the countries' wider economic and national-security relationship. Japan's Vice Finance Minister for International Affairs Atsushi Mimura described the latest intervention as the culmination of that alliance, which Citi views as policy coordination that may also support Japan's $550 billion U.S. investment programme. The bank does not believe Treasury Secretary Scott Bessent is implementing a proposed Mar-a-Lago accord, though dollar-selling intervention through the Federal Reserve's Foreign and International Monetary Authorities facility was one element of that framework. Citi said Bessent appears concerned that prolonged yen weakness could recreate conditions seen before the Asian currency crisis in the late 1990s, and President Donald Trump's description of the intervention as a signal of friendship suggests Washington supported the action. The move may also send a warning to Japanese Prime Minister Sanae Takaichi, whose reflationary policies could place renewed downward pressure on the yen, and Citi believes Washington wants Tokyo to moderate that stance. The bank drew a comparison with 1998, when the U.S. initially refused to participate in coordinated intervention as the yen weakened, and USD/JPY later plunged from ¥147 to ¥108 within six months after the collapse of Long-Term Capital Management disrupted financial markets. Another unusual feature of the latest action was U.S. intervention to sell euros and buy yen, which Citi views as a temporary shift by the Treasury's Exchange Stabilization Fund from a historically expensive euro into an undervalued yen. Japan could take similar action if EUR/JPY rises toward ¥185 to ¥186, and European authorities may tolerate limited intervention following Washington's move. USD/JPY is expected to remain the main focus, and intervention could also seek to push EUR/JPY below its recent low near ¥180, at least temporarily. Markets will watch the Jackson Hole symposium from August 27 to 29, followed by G7 and G20 finance meetings in Asheville on August 31 and September 1, for further policy signals.

Wells Fargo announced a proprietary tokenized deposit platform set to launch in Fall 2026 for select corporate and commercial clients, initially enabling around-the-clock USD-GBP cross-border payments. The platform introduces programmable payments via smart contracts, allowing corporate treasurers to set conditions like delivery-versus-payment triggers, and routes funds through tokenized deposits that carry the same FDIC insurance and regulatory protections as existing deposits. Simultaneously, Wells Fargo is co-building a shared interbank network through The Clearing House with JPMorgan, Bank of America, Citi, and 11 other banks, targeting the first half of 2027, to address the current lack of interbank settlement for tokenized deposits on private blockchains. The dual-track strategy hedges against the risk of deposit disintermediation from stablecoins, which a Treasury TBAC report estimated could put $6.6 trillion in deposits at risk, while tokenized deposits retain structural advantages under the GENIUS Act, including FDIC insurance and the ability to pay interest. CFO Mike Santomassimo stated the move enables clients to move money with greater ease and speed, building on the bank's established infrastructure.

SK Hynix's American depositary receipts become convertible on Thursday US time, allowing holders to swap between US-listed ADRs and Korea-listed common shares for the first time since the company's $26.5 billion mega listing. The conversion mechanism, managed by depositary bank Citigroup, lets investors surrender ADRs to receive Korean ordinary shares or deposit Seoul-listed stock to issue new ADRs, a process expected to take three to five days. However, the number of shares convertible to ADRs is capped at 2.5% of total shares outstanding and that quota is already fully utilized, meaning no additional Korea-listed shares can be converted into ADRs unless existing ADR holders first cancel their receipts and switch back to Korean stock. SK Group Chairman Chey Tae-won said on July 10 that the company is open to issuing more ADRs if investor returns are strong and the share price remains stable. The one-way constraint has allowed the ADRs to trade at a persistent premium, averaging about 26% since the offering and reaching as high as 51%, and the conversion will test whether arbitrage can narrow that gap.

With renewed tensions in the Middle East and rising crude oil prices, a growing number of brokerages believe the Federal Open Market Committee could decide on a rate hike at this week's meeting. While most major firms still expect rates to remain unchanged, BofA Global Research and Deutsche Bank see three and two more hikes respectively starting in September. As Brent crude touched one hundred dollars a barrel, concerns have mounted over aggressive rate increases to curb inflation. UBS Global Research said it would not be surprised if the Fed hikes to demonstrate its commitment to fighting inflation, while Citigroup noted it would be difficult to justify a hike based on declining market-based inflation expectations. Traders are now pricing in about a thirty-two percent chance of a hike this week, up from around ten percent two weeks ago.