Last year, Citigroup employees accidentally began transferring funds to clients’ accounts. The incident, which occurred last April, first reported by the Financial Times that it had granted a client’s account a whopping $81 trillion in its intended amount (only $280).
Citigroup itself has a market capitalization of only about $150 billion, and the total US GDP is worth around $27 trillion. The European Union’s GDP is approximately $17 trillion. China’s GDP is nearly $18 trillion. So, to be clear, the transfer amount would have been more money than most of the developed economies combined. It is not clear where the banks will get the money, and unfortunately the client in question was unable to maintain the funds (they never existed).
It is also unclear whether the person who has begun transfers will continue working. In communications with the Federal Reserve and the Secretary of the Money, Citi called the incident a “near miss.” The FT reports that there are no funds left the bank.
In fact, “near misses” seem to be happening quite a bit and is the official category of screw-ups in the banking industry. According to FT reports, the categories above apply to incidents that are not eligible for regulatory scrutiny.
According to an internal report seen by the FT, there was an outbreak of over $1 billion last year if the bank is processing the wrong amount but can ultimately recover the funds. The figures fell slightly from 13 the previous year. City declined to comment on the wider event. No nearer mistakes need to be reported to regulators. This means there is no comprehensive public data on how often these incidents occur across sectors. Several former regulators and bank risk managers said near misses above $1 billion are rare across the US banking industry.
Ultimately, the bank’s automated system was responsible for stopping the incredibly large transfers, but the two human employees initially missed out on a huge money outflow. The third employee finally caught up with something wrong about 90 minutes after the relocation began, FT wrote. “Detective Control quickly identified input errors between two Citi ledger accounts and reversed the entries despite the fact that payments of this size were not actually possible,” the company told the New York Times.
The Times notes that City has made some massive fuckups before. About two years ago, accounting errors in trade encouraged massive sales of European stocks, ultimately worth $322 billion. Citigroup was fined $79 million for causing such significant economic disruption.
Gizmodo will contact Citigroup for comments and will update this story if they respond.
