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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.
"Citi managed the situation appropriately and our systems and
controls functioned throughout the period."
The Bank of England and the Bank of International Settlements,
whose markets committee is overseeing an investigation into the
crash with input from the BoE, had no immediate comment on the
Financial Times report.
The pound dived and rebounded by about 10 percent in a few
minutes at the start of Asian trading on Oct. 7, an
unprecedented swing for a major currency at an hour when the
market is at its lowest ebb.
The moves added to the hefty losses the pound has suffered since
June's British vote to leave the European Union. There were also
some sales of UK assets by investors worried over the stability
of the currency and its impact on inflation.
Market participants generally agree the sell-off was at least
worsened by the algorithmic machine trading that makes up much
of the global currency market, while some have speculated the
initial move may have come from electronic news gathering
software or other parameters used in trading programs.
The final report from BIS is due in January, although officials
say it will probably focus on how the market as a whole
functioned and it is not clear if it will discuss the role of
particular institutions and orders in the slide.
(Reporting by Patrick Graham, editing by Nigel Stephenson/Jermey
Gaunt)
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