Citigroup acknowledged an error by one of its traders on Monday hours after some European stocks were hit by a short, sudden tumble.
Nordic stocks were particularly hard hit, with Sweden’s benchmark OMX 30 tumbling as much as 7.9 per cent before recovering to close 1.9 per cent lower. Overall, the regional Europe Stoxx 600 index slid as much as 3 per cent before trimming its losses to trade down 1.5 per cent.
Market participants attributed the steep drops to the US banking group bungling a trade of a basket of shares that included many Swedish names. Citi later confirmed that one of its traders had “made an error when inputting a transaction”, without providing further details.
“Within minutes, we identified the error and corrected it,” the bank said in a statement.
For Citi, the trading mishap will invoke memories of its blunder in 2020 when it erroneously transferred $900mn to creditors of the cosmetics company Revlon.
The bank was only able to recoup a portion of the funds. It was also later fined $400mn by US regulators for failing to correct deficiencies in its risk and control systems, and ordered to upgrade its processes and its technology.
Jane Fraser, Citi’s chief executive since February 2021, has stressed that risk and controls remain a priority for the bank, referring to them as “non-negotiables” at an investor event in March.
So-called flash crashes, which refer to brief price collapses, have become more severe with the proliferation of high-frequency trading firms. The term was coined in May 2010 when US stock indices plunged at a dizzying speed.
https://news.google.com/__i/rss/rd/articles/CBMiP2h0dHBzOi8vd3d3LmZ0LmNvbS9jb250ZW50LzY1YjJlMzRlLTNiMzAtNGYxZC1hZDU5LTY3ZjlkOTFkODNhNNIBAA?oc=5
2022-05-03 01:35:32Z
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