(BVO) – It was the right client but the wrong amount.
Known as a ‘fat finger’ episode, a junior trader at Deutsche Bank wired $6 billion to a US hedge fund, according to the UK’s FT newspaper.
The incident is said to have happened in June, but embarrassingly enough, news of it has emerged a day after the bank’s new boss announced a radical restructuring plan, which could see a number of top jobs go.
Jasper Lawler is from CMC Markets.
ANALYST, CMC MARKETS, JASPER LAWLER,
“There should be flags that pop up in the system, control mechanisms when that kind of level of money is being sent out, ‘hold on is that right, is there an extra zero here, is there not’. It really just adds even more concern to a real corporate structure problem over at Deutsche Bank and in a way justifies the big shake up that the new CEO is trying to implement at the moment.”
‘Fat finger’ incidents are rare but others have included;
HSBC in Jan 2014, who reportedly lost over $660 thousand in less than 30 seconds.
A trader at Japan’s biggest bank Mizuho, mis-keyed a share trade reportedly worth $330 million.
CIBC’s Jeremy Stretch.
JEREMY STRETCH, CIBC,
“It makes great copy but I think in terms of the integrity of the systems that operate between financial institutions, that’s where the really source of concern and contention may well lay.”
On this occasion the bank was able to recover the amount from the client the following day.
But incidents like this remain a concern throughout the banking community.
The error is said to have been reported to the U.S. Federal Reserve, the European Central Bank and the UK Financial Conduct Authority.