The French Treasury reproached Citigroup Inc. for bank’s multibillion-dollar “Dr.Evil” bond trade in August doing harm to the European markets.

"Citigroup created havoc in European government-bond markets," said Bertrand de Mazières, chief executive of the French Treasury. "We told Citigroup that they had tarnished the image of European government-bond markets and that this was regrettable." This is the first sing of public discontent with a European Treasury at Citigroup’s actions, which indicated that the matter has affected the bank’s business prospects.

The French Treasury was forced to place Citigroup on a lower rank in its table of primary-debt dealers. "Citigroup isn’t at the level of the primary-dealers’ ranking [that] it should have been, due to the August trading," said Treasury Deputy Chief Executive Benoit Coeure.

The ranking plays a significant role as it is used by the treasury departments to decide which banks deserve to be granted leading roles in state privatization. The Citigroup was punished since the Treasury said it failed to promote the euro-zone government-bond market as a result of the trade.

Citigroup declined to comment the situation.