A transaction error probably led to a price slide.
(Photo: dpa)
Dusseldorf It is now clear who is responsible for the flash crash on the European stock market on Monday: Wall Street bank Citigroup. In a statement, the US bank announced on Monday evening (local time) that one of its London dealers had made a mistake in a transaction that triggered the price slide. “Within minutes we identified the error and corrected it,” Citi said.
On Monday morning, a sharp drop in prices temporarily caused a stir: the Stockholm stock exchange fell by up to eight percent at times, and the EuroStoxx50 lost up to three percent. In just a few minutes, 300 billion euros were destroyed.
A spokeswoman for the US stock exchange operator Nasdaq, which also operates the Stockholm Stock Exchange, announced shortly thereafter: “The reason for the slump was a sale by a market participant.” Malfunctions in the Nasdaq systems were not found.
Citi has now entered into talks with regulators after the incident, according to financial service Bloomberg, citing a person familiar with the matter. She does not wish to be named.
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However, the error could not only damage the bank’s reputation, but also entail financial consequences for Citi: Because the stock exchange operator Nasdaq said that after the review it saw no reason to cancel the deals made during the event.
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