Citi’s Response Appropriate During Sterling Flash Crash

Citi (C.N) said on Wednesday that its trading operations functioned appropriately in a thin and illiquid market during October’s “flash crash” in sterling, responding to a Financial Times report that a trader at the U.S. bank exacerbated the pound’s fall.

The FT cited unnamed bankers and officials as saying that Citi’s traders were not believed to have started the slide in the currency but that its Tokyo desk played a key role in sending the pound to its lowest levels in 31 years.

“Sterling fell sharply following a news event just after midnight UK time, when the GBP spot foreign exchange market was extremely illiquid,” Citi, the biggest player in the $5 trillion a day global currency market, said.

Reuters

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Craig Erlam

Craig Erlam

Senior Currency Analyst at OANDA
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the Wall Street Journal and The Telegraph, and he also appears regularly as a guest commentator on networks including Sky News, Bloomberg, CNBC and BBC. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.