Image source, Getty ImagesCitigroup said that one of its traders made an error in the stock market on Monday.
A flash crash is a rapid fall in the price of one or more assets.
The major share indexes plunged just before 8am on Monday, causing trading to be halted in several markets.
Nordic stocks were hit the hardest.
One of our traders made an error this morning. The New York-based bank said in a statement that it identified the error and corrected it within minutes.
On a day when trading was particularly thin due to public holidays around the world, the flash crash caused European shares to fall.
The benchmark Stockholm OMX 30 share index fell by 8% at one point, before recovering most of those losses to end the day 1.87%) lower.
Human error can be the cause of flash crashes.
Trading errors and flash crashes can be costly. They have led to criminal convictions and triggered changes to stock market rules.
A computer-trading glitch at US financial services firm Knight Capital caused a major stock market disruption, costing the company around $440m.
New regulations were put in place to avoid a repeat of the flash crash that happened on the Singapore Exchange in October of last year.
In 2020, a UK-based former stock market trader was sentenced to a year of home imprisonment for helping to cause a brief $1tn US stock market crash 10 years earlier.
Sarao created the illusion of market demand by placing thousands of orders that he did not intend to fulfill. He was able to make money when he canceled or changed his bids.
The May 2010 flash crash was caused by the activity known as "spoofing", which contributed to market instability.
The US made spoofing a crime in 2010 as part of a broader effort to tighten regulations.
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