Haghani suggests Citigroup liquidations may have triggered 1998 spread blowout

What was said

"it's probably the case that liquidation within Cityroup of the arbitrage desks kind of set off the widening of all the spreads that ultimately resulted in the distress and crisis of late 98."

Haghani says one plausible driver of the 1998 market dislocation was deleveraging inside large banks, singling out what he calls liquidation within Citigroup’s arbitrage desks. He frames this as a likely catalyst for spreads widening across markets, which then amplified LTCM’s losses.