Citigroup admitted a mistake made by one of its traders on Monday hours after some European stocks were hit by a short and sudden drop.
Nordic equities were particularly hard hit, with Sweden’s benchmark OMX 30 index falling 7.9% before recovering to close down 1.9%. Overall, the regional Europe Stoxx 600 index slid as much as 3% before paring losses to trade 1.5% lower.
Market participants attributed the sharp declines to the US banking group which missed a trade of a basket of shares including many Swedish names. Later Monday, Citi confirmed that one of its merchants “made a mistake while entering a transaction,” without providing further details.
“Within minutes, we identified the error and fixed it,” the bank said in a statement.
For Citi, the business incident will evoke memories of its 2020 blunder when it mistakenly transferred $900 million to cosmetics company Revlon’s creditors.
The bank was only able to recover part of the funds. It was also later fined $400 million by U.S. regulators for failing to fix flaws in its risk and control systems, and ordered to upgrade its processes and management. technology.
Jane Fraser, Citi’s chief executive since February 2021, stressed that risks and controls remain a priority for the bank, calling them “non-negotiable” at an investor event in March.
So-called flash crashes, which refer to brief price crashes, have become more serious with the proliferation of high-frequency trading firms. The term was coined in May 2010 when US stock indices plunged at breakneck speed.