Categories: Business

US bank admits trader blunder after ‘flash crash’ hits European shares | Business News

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A so-called flash crash in European stock markets on Monday was caused by a single sell order trade that was made in “error”, a major US bank has admitted.

While the FTSE 100 was closed in London for the Bank Holiday, other European stock markets endured plunging values with Sweden’s OMX 30 falling the most – by 8% – in a matter of minutes.

Citigroup said on Monday night that it had acted swiftly to correct the blunder by one of its traders, who was reported by Bloomberg to have been based in London.

“This morning one of our traders made an error when inputting a transaction. Within minutes, we identified the error and corrected it,” the New York-based bank said in a statement.

Brokers described the event as a “flash crash” due to the fact markets fell so sharply without any apparent reason at the time.

The event was created by an erroneous trade on a day of light trading activity, which often makes such a blunder worse as automated systems take over.

Sweden’s financial supervisory authority said earlier it was investigating the plunge and was in contact with US operator Nasdaq, which runs Stockholm and other stock markets in the Nordics region.

The error sent the wider pan-European STOXX 600 benchmark more than 2% down before the correction was applied by Citi.

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