After a sudden 8% decline in Swedish stocks, Citigroup Inc. said its London trading desk caused a flash crash in Europe that sent shares across the continent tumbling. A trader at the New York-based bank made an error when entering a transaction this morning, the bank wrote in a statement. The error was corrected shortly after the mistake was found.
Citigroup is in discussions with regulators and exchanges about the incident, reveals a person familiar with the matter who requested anonymity in order to discuss non-public information. The OMX Stockholm 30 Index experienced a knee-jerk sell-off, which knocked over the main European indices by as much as 3% in less than five minutes, wiping out 315 billion euros at one point in time.
Nasdaq Stockholm spokesman said the short-lived slump was not a technical glitch. “Our first priority was to rule out technical problems with our systems, and our second priority was to rule out external attacks on them. “We have now excluded both,” said Nasdaq Stockholm spokesman David Augustsson. “A very substantial transaction by a market participant is clearly the driving force behind this move in the market,” he confirmed.