Citi error causes Europe 'flash crash'; Goldman trims Russia credit exposure

TOP NEWS IN BANKING & FINANCIAL SERVICES

* An erroneous sell order by Citigroup Inc. caused major stock indexes in Europe to plunge in a so-called "flash crash" that heavily affected Nordic markets, Reuters reported, citing people familiar with the matter. Nasdaq said a single sell-side order caused the drop, according to the news outlet, while a separate report by The Wall Street Journal that cited a Citi representative said one of the bank's traders made the error while inputting a transaction. The Reuters report noted that the crash happened during a day of light activity, with a Nasdaq spokesperson in Stockholm saying that there were no disturbances identified in the exchange operator's systems.

* The Goldman Sachs Group Inc. slashed its total credit exposure to Russia as of March 2022 to $260 million from $650 million as of December 2021, according to regulatory filings. The latest exposure consisted of $56 million related to over-the-counter derivatives and $204 million related to deposits and other receivables. Goldman said market exposure to Russia and total exposure to Ukraine as of March were not material.

➤ Large Israeli banks' efficiency deteriorates further in Q4'21

Large Israeli banks saw their cost-to-income ratios deteriorate in the fourth quarter of 2021, compared to the previous three-month period, S&P Global Market Intelligence data shows.

➤ Asia-Pacific finance M&A hit by geopolitics, supply chain disruptions in Q1

Geopolitical tensions and the drag from global supply chain disruptions may dampen M&A deals in Asia-Pacific after the number of such deals fell in the first three months of 2022.

READ MORE about the market reaction and industry impact of the evolving situation in Russia and Ukraine in our new Issue in Focus.

EARNINGS SPOTLIGHT

Fidelity National Information Services Inc. and Broadridge Financial Solutions Inc. released their most recent financial results today.

BANKING

* Citigroup CEO Jane Fraser said the bank is in "active dialog" to sell its consumer and commercial banking operations in Russia as investors grow concerned that the country's invasion of Ukraine will prevent the company's exit from Russia, Bloomberg News reported.

* In another matter, Banco Santander SA clarified that it will only buy Citi's retail operations in Mexico if it can pay cash and if certain other requirements are met, Bloomberg reported, citing an interview with Banco Santander Chair Ana Botin.

* A federal appeals court declined to overturn former JPMorgan Chase & Co. currency trader Akshay Aiyer's sentence, saying Aiyer will have to spend eight months in prison for conspiring to fix prices and rig bids in central and Eastern European, Middle Eastern and African currencies, Bloomberg reported.

* Christopher Maher, chairman, president and CEO of OceanFirst Financial Corp., said the company's net interest margin is expected to expand 5 to 10 basis points in the second quarter, with the potential to outstrip that guidance.

* MidWestOne Financial Group Inc. unit MidWestOne Bank announced an offering called Overdraft Flex, which will allow eligible customers to avoid a fee when they go overdrawn by $50 or less.

FINANCIAL SERVICES

* Goldman CEO David Solomon said that in-office attendance of the company's employees is between 50% and 60%, compared with pre-pandemic figure of about 80%, CNBC reported. Solomon also said that getting more people to go back to the office could take years, according to the report.

* MoneyGram International Inc. again responded to Consumer Financial Protection Bureau Director Rohit Chopra's statement about the company that called it a "repeat offender" of consumer financial protection laws. MoneyGram said the accusations are false, that it had never before been subject to any enforcement action by the CFPB, nor had MoneyGram ever been publicly accused of violating any of the laws or regulations under the CFPB's purview.

* Evertec Inc. increased the company's 2022 adjusted EPS outlook despite the impact to earnings of its transaction with Popular Inc., saying that some potential effects of the deal have already been considered in the equation.

* Coinbase Global Inc. CEO Brian Armstrong believes that in 10 years, 1 billion people will have used or tried cryptocurrency, compared to the current 200 million users, Bloomberg reported.

POLICY AND REGULATION

* A report released by the CFPB found that some servicers have been engaging in unfair acts by repossessing vehicles, even after consumers took intentional actions to prevent repossessions. The agency also found that credit reporting companies commonly fail to conduct investigations on debt disputes in a timely manner, and they also fail to review and consider all the relevant evidence submitted by consumers.

* The Financial Industry Regulatory Authority has asked for comments on sales practices for complex products amid an increase in accounts trading in such products. Comments are due May 9.

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