UK regulators have summoned Citigroup executives for fresh discussions over its role in October's "flash crash" in sterling, seeking more information about the supervision and controls the bank had in place.
The decision to recall Citigroup, as part of the UK inquiry, for a new meeting, expected to be held in the coming days, comes after it was reported the US bank's Tokyo operations were under scrutiny for playing a central role in sending the pound to its lowest levels during the sharp early-morning collapse in thin Asian trading on October 7th.
During the initial phase of the inquiry, the UK regulators talked to several banks but focused on Citi, the world’s largest currencies-dealing bank, about what caused the drop.
But in recent days, the Bank of England's Prudential Regulation Authority and the market regulator, the Financial Conduct Authority, have singled out Citi for a new round of discussions on how it supervised the individuals and trading systems connected to the currency's plunge, people with direct knowledge of the new meeting said.
The BoE, FCA and Citi all declined to comment.
Sterling tanked in the early hours of October 7th, declining fairly sharply from $1.26 before it collapsed shortly after breaching $1.24 to the dollar, slumping as low as $1.14 on some systems.
People with knowledge of events at Citi that night say the bank was not the first to sell the pound, nor was it the first to trade under $1.20.
But a Citi trader in Tokyo reptedly hit the “sell” button on an electronic dealing tool called Aggregator shortly afterwards, exacerbating the second stage of the drop.
Copyright The Financial Times Ltd 2016
