By Zach Fox

Citigroup Inc. President James Forese said June 10 that the bank has increased resources in risk management for employee misconduct following billions of dollars in fines related to manipulation of foreign exchange markets.

Speaking during the Morgan Stanley U.S. Financials Conference, Forese said the bank gained just $1 million from the misconduct.

"The misconduct of some of our employees has been hugely painful to the institution and to shareholders," Forese said. "I would estimate that the value that we generated from the illegal conduct in foreign exchange was an order of magnitude of about $1 million. We paid out about $2.5 billion in fines and penalties in foreign exchange. So, the misconduct of one or a small number of employees was incredibly damaging and costly. And so we're spending a lot of time improving the conduct of our employees."

He said the bank has also ramped up its risk management resources for cybersecurity risks in order to stay as current as possible with technology developments.

But Citigroup is by no means withdrawing from the currencies business. In fact, Forese said the decisions by some of the bank's competitors to exit certain fixed-income businesses could provide a boost for Citigroup.

"That's definitely a tailwind for us. Fixed income in particular I think has seen the most amount of capacity retreat, and capacity that hasn't been filled in," he said. "In the past, when there's been capacity shrinkage in the industry, someone else has always filled that in. I think here in FICC that isn't what we're seeing now. We're seeing genuine retreat."

Forese said the bank is planning to spend significant resources to improve its market share in its equities business. As an industry leader in rates and currencies, Forese said the bank will continue to invest to ensure "sustained leadership" but that maintaining a top position requires fewer resources than trying to move up the leaderboard.