Incident Report: Citigroup’s $81 Trillion Error

In a startling incident last April, a Citigroup employee inadvertently initiated a fund transfer to a client’s account, which would have made them the wealthiest individual in human history. According to the Financial Times, the transfer amount was a staggering $81 trillion, instead of the intended $280.

To put this into perspective, Citigroup’s market capitalization is approximately $150 billion, while the entire U.S. GDP is around $27 trillion. The European Union’s GDP is roughly $17 trillion, and China’s GDP is nearly $18 trillion. This means the transfer amount would have exceeded the combined GDP of most developed economies. It is unclear where the bank planned to source the funds, and unfortunately, the client did not get to retain the non-existent funds.

The bank referred to the incident as a “near miss” in communications with the Federal Reserve and the Office of the Comptroller of the Currency. However, it is uncertain whether the employee responsible for the transfer faced any consequences. The Financial Times reports that no funds actually left the bank.

Near Misses in the Banking Industry

Near misses, a formal category of errors in the banking industry, occur when a bank processes an incorrect amount but is able to recover the funds. These incidents do not require regulatory scrutiny. According to an internal report seen by the Financial Times, Citigroup experienced 10 near misses of $1 billion or more last year, down from 13 the previous year. The bank declined to comment on these events.

A total of 10 near misses — incidents when a bank processes the wrong amount but is ultimately able to recover the funds — of $1bn or greater occurred at Citi last year, according to an internal report seen by the FT. The figure was down slightly from 13 the previous year. Citi declined to comment on this broader set of events. Near misses do not need to be reported to regulators, meaning there is no comprehensive public data on how often these incidents occur across the sector. Several former regulators and bank risk managers said near misses of greater than $1bn were unusual across the US bank industry.

Automated Systems and Human Oversight

Automated systems at the bank were responsible for halting the massive transfer, while two human employees initially missed the error. A third employee eventually detected the issue approximately 90 minutes after the transfer was initiated. Citigroup stated, “Despite the fact that a payment of this size could not actually have been executed, our detective controls promptly identified the inputting error between two Citi ledger accounts and we reversed the entry.”

Previous Errors and Consequences

Citigroup has a history of significant errors. Two years ago, an accounting mistake led to a massive selloff of stocks in Europe, resulting in the loss of $322 billion in value. The bank was subsequently fined $79 million for causing economic chaos.

Gizmodo has reached out to Citigroup for comment and will update this story if a response is received.