Citigroup trader’s error caused ‘flash crash’ in European markets

Citigroup, the US banking giant has said that one of its traders committed an error in the stock market “flash crash” in Europe, said local media reports.

An extremely fast fall in the price of one or more assets is called a flash crash. This is often caused by a trading mistake. After the flash crash, trading was halted in several share markets on Monday.

Nordic stocks were hit the hardest, while other European indexes also plummeted for a short time.

“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 late on Monday.

The BBC said that the flash crash caused European shares to undergo a sudden fall on a day trading was particularly thin due to public holidays around the world.

Among the indexes, Stockholm OMX 30 share index in Sweden was one of the hardest hit. At one point, it fell 8 per cent. It later recovered most of these losses to end up 1.87 per cent lower at the end of the day.

Flash crashes can be caused by human error, or so-called “fat finger” trades – a reference to someone incorrectly typing the details of a trade.

In August 2012, a computer-trading glitch at US financial services firm Knight Capital caused a major stock market disruption, costing the company around $440 million.

A flash crash on the Singapore Exchange in October 2013 saw some stocks lose up to 87 per cent of their value and resulted in new regulations being put in place to avoid a repeat of the incident.