Thousands of home purchases have been jeopardized after the Bank of England’s critical payments system failed for almost six hours on Monday morning, its biggest crash since 2014.
(Bloomberg) — Thousands of home purchases have been jeopardized after the Bank of England’s critical payments system failed for almost six hours on Monday morning, its biggest crash since 2014.
The BOE’s Real-Time Gross Settlement service, which settles on average £775 billion ($981 billion) a day of electronic transfers between banks, went down from about 6 a.m. until noon, according to a person familiar with the matter, who requested anonymity disclosing details of the stoppage.
The BOE said in a statement issued shortly after noon that it had experienced “a technical issue” that had “been resolved and settlement will resume shortly.” CHAPS, the payment system used for high value transactions including property sales, was also knocked out because it runs on RTGS, the BOE said.
On average, £380 billion is cleared over CHAPS in 200,000 transactions every day. With most property transactions lined up to complete first thing in the morning, there is a risk that the backlog may not be cleared.
The person said the cause of the outage was a problem with the database and not related to an ongoing RTGS upgrade. They added that the service may be kept open longer than the usual 4:20 p.m. close to clear as many delayed transactions as possible.
Maintaining RTGS is one of the bank’s core responsibilities, because it is central to financial stability in the UK.
The last major outage was in 2014, when RTGS went down for nine hours. Back then the BOE ordered an external review which found that approximately 700 housing transactions were delayed by a day. The BOE paid more than £4,000 in total to nine people in compensation, the report found.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.