A trader at the U.S. firm made a mistake “inputting a transaction,” Citigroup said after a knee-jerk selloff in Swedish stocks in five minutes wreaked havoc in bourses from Paris to Warsaw. The violent reaction saw the main European index lose as much as 3%, wiping out 300b euros at one point. It revived questions how large financial firms can prevent such errors, and whether markets have sufficient safeguards in place.
“The reality is that, despite all the fancy control systems, large parts of trading are still manual and human-driven, meaning the ‘fat finger’ isn’t just a metaphor,” said Oliver Scharping, a portfolio manager at Bantleon.