> Citi learned the hard way

Do we have evidence that they actually learned anything from this?

No, we just know that they paid for a lesson

Surely the cost of upgrading their user interfaces is less than the $500M lost here? What about next time? What about previous losses that were small enough not to warrant press attention but still add up over time?

To be clear, the entire $500 million isn't lost yet. Citi will need to carry the loan itself for Revlon, so the money didn't evaporate. The cost will be the admin overhead, the reputation loss from the event, and the cost for having to carry the loan into the future (or not, if Citi can find a way to securitize it out).

If Revlon defaults on the loan entirely, then the money evaporates.

The value of the debt is 42¢on the dollar. So Citi is down 58% on the book value of the $500M in debt. They lost close to $300M from the mistake.

Those are unrealized paper losses. The final accounting can end up being a loss of anything in the range of $0-500M depending on how it all shakes out (whether Revlon goes bankrupt, whether Citibank sells the loans on at their reduced valuations now or holds on, and how the appeal goes).

In all my previous companies whenever we earned more than expected from a given project, we'd routinely analyze it and it was our job to make sure we can somehow repeat or benefit from this lesson for the future. In the same way, whenever there was a significant drop, it was our job to make sure we know the reasons behind it and implement preventive measures if applicable. The only factor that changed was the level of 'why?'s asked.

I can't imagine it's any different in Citibank.

> I can't imagine it's any different in Citibank.

Having worked for companies the size of small startups up through megacorps, my experience has been that megacorps can be unfathomably foolish in these kinds of things.

I'd expect Citibank to be less likely to learn (and apply) the right lessons from this experience, than a small or medium-sized business would.