Worrying day for people moving house, as the system used to move billions of pounds between banks in the UK every day crashes. * Latest: System back up, says Bank * Problems at the Bank of England -- new readers start here * Home sales hit in Sheffield....and in Great Missenden 6.33pm BST Todays glitch may be fixed, but it still raises serious questions over the Bank of Englands competency. Swaha Pattanaik and Dominic Elliott of Reuters BreakingViews argue that Andrew Tyrie and the Treasury Committee need to get tough. After all, the BoE hasnt been slow to criticise others.... Former BoE Governor Mervyn King rapped Royal Bank of Scotland for an IT bungle which affected the lenders customers in 2012. The Financial Conduct Authority is now investigating what happened at RBS as a result.To avoid accusations of double standards, the BoE should submit to an equally rigorous inspection. What this incident serves to highlight is the fragility of the Banks technology platform, a fragility that has been exposed in the most public of ways, despite the Banks initial reticence to discuss what had occurred. Andrea Leadsom, Economic Secretary to the Treasury, has in the past lectured retail banks on the need to increase the levels of technology expenditure. 5.49pm BST Todays system outage must have been particularly worrying for anyone whose house sale or purchase was delayed from last week. In The Telegraph, mortgage broker Jonathan Harris explains: However, with everyone pushing to complete on a Friday there are a proportion of deals which dont happen - maybe 15pc - which are pushed back to the following Monday. These are already critical and if they are delayed yet again, it will be hugely inconvenient for buyers. 5.04pm BST Parliaments Treasury Committee will be demanding answers to find out how the Real Time Gross Settlement system, such a vital part of Britains financial system, could fail today. A crucial part of the UKs financial infrastructure failed for several hours today. I will be writing to the Bank of England to find out why. The whole economy depends on a reliable payment system. We need to have confidence that the cause has been found and addressed. 4.13pm BST The Bank of England has also confirmed that its Real-Time Gross Settlement system is (at last!) fixed. They say: The Bank of England confirms it is now processing payments through RTGS as normal. We have extended opening hours until 20:00 hrs (BST) to maximise the opportunity for settlement. 4.09pm BST Its official, the Chaps system is up and running. That means the Bank of England must have (finally) fixed its Real-Time Gross Settlement system that underpins the UK financial system. The Bank of Englands RTGS system is now processing payments again following a resolution of the technical issue experienced earlier today. As such, CHAPS is now processing the backlog of payments and is confident that all payments submitted today will be processed today. To help customers and to ensure payments can be processed today CHAPS is extending its operating times until 19.40 hrs. Customers are advised to contact their own bank for any queries they may have on their specific payments. 4.06pm BST Were hearing that that Chaps system might, after many hours, finally be up and running again. Harry Wilson of The Times reckons it will be able to clear todays backlog in time: Am told that @bankofengland #CHAPS system is now operational after outage of several hours. Banks now working to clear payments backlog. #CHAPS came back online at 15:31. Senior banker tells me todays backlog should easily be cleared. 4.01pm BST Over in Great Missenden, Buckinghamshire, Amanda Harts plan to sell her #property today has been hit by the collapse of the Chaps system. She explains that a friend warned her about the problems at the Bank of England this morning. There were purchases that I was going to make today with these funds, which I cant now make. And there are creditors I was going to pay off, which could mean another days interest. I guess Im one of the lucky ones. 4.00pm BST Just in...The Chaps system is going to keep running until 7.40pm to process transactions. All payments submitted to Chaps will be processed today: Chaps is staying open to 7.40pm to process the transactions (usually closes at 4pm) 3.48pm BST NatWest have been told by the Bank of England that the problems should be fixed, so that payments can be processed today: The Bank of England (BoE) are reporting an industry wide issue impacting CHAPS payments. 1/3 The BoE are currently working on a fix for this and they have reassured us that payments made today will be processed. 2/3 If we are notified of any change, we will let you know. 3/3 3.42pm BST The Law Society is demanding answers about what went wrong with such a vital system. Vice president Jonathan Smithers says: It is critical for solicitors to have access to this system for house sales and purchases and many other commercial transactions that rely on a payments scheme that processes and settles important and time-dependent payments in sterling. We are talking to the relevant bodies to see if we can obtain some understanding of why the system has failed and assurances that this will not occur again. 3.38pm BST Monday is the third-most popular day for completing a home sale, according to housing expert Neal Hudson who kindly tweeted this chart. Housing completions by day of the week (2013) cc @graemewearden pic.twitter/E7dmnNLLUw 3.29pm BST It is likely that a software glitch is to blame for the collapse, taking the Banks back-up system as well as the live site. The Bank of England recently published a research paper on its efforts to improve the resiliency of the Real-Time Gross Settlement infrastructure (which underpins CHAPS). It is conceivable that both sites could become unavailable at the same time. Environmental factors leading to an inability to physically operate at a site, or IT hardware failures, could cause two simultaneous but unrelated problems. Alternatively, and perhaps more likely, there could be a software failure which creates a single problem that affects both sites. Such an event resulted in a six-hour service interruption to the Banks RTGS infrastructure on 12 February 2007. So the Bank of England payments system has two sites, presumably both down t.co/CndU3TrhOM there could be a software failure 3.22pm BST Technology site The Register has a handy explanation of what went wrong: We were told that the problem was due to an update over the weekend, when the details of new CHAPS users were being added and old ones removed. This is meant to be a routine operation, but a glitch caused the system to fall down. 2.37pm BST Bank of England cannot say whether it will get CHAPS back running today, nor whether it will extend hours, nor why backups failed. #OhDear 2.35pm BST The collapse of the Chaps system will have a knock-on effect on people trying to move house today, experts are warning. Whilst Monday is not the busiest day in terms of completions, the failure of the payments system for UK house purchases will have a cascading effect and it is likely any payments will now be held up for a day or more as #money takes time to transfer, which also means a delay for those hoping to move. This week is half term for many, so it will be a time when a lot of people are trying to move house no doubt it will be a frustration for those that are now delayed. The one part of a sale which is fixed is the completion date - with payments not being able to be processed today, this will not only have an effect in terms of the completion date moving, but also accompanying arrangements which may have been scheduled, such as moving support or van hire and the transfer of utilities to the new address. 2.22pm BST Its pretty rare for a vital systems such as the Chaps payment service, which handles hundreds of billions of pounds each day, to crash in this way. Technical glitches are inevitable, which is why there should be a back-up system in place, points out Izzy Kaminska of the Financial Times: The BoE is supposed to have a contingency backup for RTGS. If theyve resorted 2 manual processing has that failed 2? t.co/nurnqPLE2G 2.07pm BST Come along, CHAPS! Pull yourself together now. There are lots of people waiting! t.co/p2M2twjzg2 2.06pm BST #Euroclear, which is the worlds largest securities transactions company, says it working closely with the Bank of England as it strives to get its Chaps payment system online again. Heres the statement: Euroclear is monitoring the current technical issue with the RTGS system at the Bank of England. We are working closely with the BoE and if necessary will extend our own operational deadlines, to ensure that all settlement and payment instructions will be processed today. 1.50pm BST Two families selling their homes through Andersons estate agents in Sheffield are caught up in the uncertainty caused by the collapse of the Bank of Englands Chaps payment system. The solicitors called to say that money had been put in the system from the purchase at the bottom of the chain but then it couldnt come out. Weve opened the garage and they are putting things in there for now. The buyers at the bottom of the chain have to be out of their rental home today Our job never ends, reassuring an 88 year old she will move today! Bank of Englands real time payment system is down t.co/svlC7Na7AQ The Bank of Englands Real Time CHAPS system is currently down so funds are slow to leave & arrive. Completions today may be affected 1.29pm BST The Bank of England is in a race against time to fix its Chaps payments system, and people who want to move house today must be watching nervously. Andrew Montlake, at the mortgage broker Coreco, has told us that people moving house usually complete the deal by 3pm. If there are going to be Chaps issues then we wont know yet transfers usually need to be done by 3pm if someone is to complete on that day. Its worth adding that Monday is not the biggest completion day Fridays tend to be the most popular day. 1.11pm BST People buying or selling a house and businesses trying to shift large sums of money faced delays on Monday after the Bank of England mechanism used for transferring money failed. The behind-the-scenes payment system which processes, on average, about £277bn of transactions daily failed to open as usual at 6am. 12.58pm BST EUROPEAN SHARES EXTEND LOSSES; STOXX 600 FALLS 1.1% hmmmm RISK OFF creeping back 12.49pm BST Back to the problems at the Bank of Englands RTGS payments system. Bank insiders say that the Bacs system, for electronic payments such as direct debts, is still working. As is Faster Payments, used for internet and telephone #banking. CHAPS is currently unable to process payments. This is due to the Bank of England temporarily pausing the RTGS settlement system to resolve a technical issue. CHAPS is currently liaising with the Bank of England who are working hard to resolve the issue which means payments submitted today will be processed. CHAPS will be extending its operational day to enable its Participants to submit and receive CHAPS payment instructions later than normal. Almost 80% of CHAPS payments (by value) are wholesale financial payments both domestic and cross-border. Any customer who is waiting for a CHAPS payment to settle today should speak to their own bank. CHAPS says it will be extending its operational day as a result of the Bank of Englands processing problems. Usually closes at 4pm 12.42pm BST IBMs disappointing results have not helped the mood in the #stockmarkets. The FTSE 100 is now down another 64 points, or 1%, and there are steeper losses in France (-1.3%) and Germany (-1.5%). *IBM SAYS DISAPPOINTED IN ITS PERFORMANCE So are DOW Futures -105 opps 12.27pm BST Ouch. IBM has just given the market a nasty jolt, reporting that sales have missed expectations and warned that it suffered a slowdown in September. Revenues at the worlds largest technology services group fell 4% in the last three months, to $22.4bn. We saw a marked slowdown in September in client buying behavior, and our results also point to the unprecedented pace of change in our industry. While we did not produce the results we expected to achieve, we again performed well in our strategic growth areas cloud, data and analytics, security, social and mobile - where we continue to shift our business. We will accelerate this transformation. 12.13pm BST And this chart shows JUST how much money is transferred each day through the Bank of Englands RTGS payments system: 12.04pm BST This article explains exactly how the Bank of Englands RTGS system holds the UK financial system together, and why todays technical problems are so unfortunate: One principal design feature of the infrastructure is its ability to make certain types of transfers continuously throughout the day. Suppose a customer of a gas company wants to pay a bill using an electronic payment. If the customer and the gas company happen to have accounts with the same commercial bank, the payment can be made very simply: the bank just debits the customers account and credits an equal amount to the companys account. No obligation between banks arises. But if the customer and the gas company have accounts with different commercial banks, then an interbank obligation does arise. To achieve the transfer from the customer to the company, the customers bank debits the customers account, and the companys bank credits an equal amount to the companys account. At this stage the customer has in effect made a transfer to their bank, and the companys bank has made a transfer to the company. An obligation has been created: the customers bank owes the companys bank the value of the payment. To eliminate this exposure, and complete the end-to-end transfer from the customer to the company, a transfer must be made from the customers bank to the companys bank. This final transfer is known as settlement. 11.44am BST The Bank of England is suffering every central banks nightmare, says financial analyst Lorcan Roche Kelly. This is every cbs nightmare (presume will be fixed fast) RT @fastFT: Bank of England pauses RTGS payment system t.co/Mzk64Q775U 11.33am BST BREAKING NEWS: The computer system which the Bank of England uses to transfer large funds between commercial banks in the UK has suffered a technical outage. The Bank of England has identified a technical issue related to some routine maintenance of the RTGS payment system and has paused settlement while we resolve it. We are working to address this issue as quickly as possible, and restart the RTGS payment system in a controlled manner. The most important payments are being made manually and we can reassure the public that all payments made today will be processed. Bank of England says has a problem with real time settlements in the system. Payments are being handled manually while it is fixed Bank - The most important payments are being made manually and we can reassure the public that all payments made today will be processed The Bank of Englands CHAPS system has been down since 6am - could affect anyone buying or selling a house, or big payments between banks 11.19am BST Twenty seven years ago, investors were reeling from the Black Monday crash of 1987. 19th October was the day when the US Dow Jones index lost a fifth of its value in a truly stupendous wipeout. If the Oct 19 1987 stock-market crashs occurred today, its equivalent point drop in 2014 Dow would be 3703.52 points (22.61% X 16,380) 11.11am BST More reassuringly, the prices of Greek sovereign debt has strengthened, pushing down yields (the rate of interest on the debt). 10-year Greek bonds are yielding 7.97% this morning, down from 8.04% on Friday night. Greece must resolutely continue to implement the agreed reforms. It is in its own interests. Being reliable creates confidence, also on the markets, Markets over-reacted and over-reaction will eventually give way to reality, If you look at recent official statement, no one is doubting that Greece has the foundation and prospects to advance. The discussion that is taking place is how we will proceed in the safest way possible. So that whole the #eurozone crisis is back thing lasted about 48hrs, yes? pic.twitter/182FzDtUSH 10.35am BST The European Central Bank has begun its new stimulus programme today, buying up covered bonds (debt backed by a cash flow from, say, mortgages or consumer loans). And Bloomberg is reporting that the ECB has wasted no time in mopping up debt from France. *ECB SAID TO BUY SHORT-DATED FRENCH COVERED BONDS And so it begins! RT @nr_zero ECB Said To Buy Short-Rated French Covered Bonds 10.18am BST Risk remains off the menu this morning Slight RISK OFF in European markets ... Stoxx 600 now off 0.5% -DAX -1% mkt still really searching for direction. 10.11am BST At least the mood in the markets is less negative than last week. Alastair McCaig, market analyst at IG, agrees: It might be a soft start for the FTSE down 32 points, but there is not the same undercurrent of panic seen in last weeks trading. 9.43am BST After a steady start, Europes main stock markets are on the slide again. The German DAX and French CAC are both down around 1%, and even the FTSE 100 is lurking in negative territory, down around 26 points. Everything is considerably calmer. Asian markets saw gains for equities and for the won, the rupiah, the baht and in G10, the Australian and New Zealand dollars. But as Europeans arrive at dealing desks, the mood is hardly ecstatic and FTSE, CAC and DAA are all firmly in negative territory. Risk sentiment may improved but not enough to drag the SG Risk Sentiment Indicator out of deep aversion (its at 0.13 on a 0-1 scale). Theres a lot of uncertainty in play early in the European session with traders evidently struggling as to how to call this market. 9.15am BST Just in.... Italian industrial orders have risen, ending a three-month slide, but the broader picture remains weak. Industrial orders rose by 1.5% month-on-month in August, a bigger rise than expected. However, orders are 3.2% down on a year ago, extending the 0.7% annual decline recorded in July. Italy Indust orders up 1.5% v 0.2% expected, but the y/y plunges to -3.2% ; -0.7% The sales numbers +0.4%mm but y/y at -2.3% from -1.3% 8.53am BST Industrial unrest has hit the eurozone today, with strikes hurting travellers in Germany. In another sign of tensions in Europes largest economy, German pilots union VC widened its strike at Lufthansa this morning to include long-haul flights. Lufthansa strike causes travel misery during school holidays t.co/tLQiFi6HYG via @euronews pic.twitter/YNdpjb0yhx 8.32am BST Tesco shares are the biggest riser in London this morning, up 3%, ahead of Thursdays delayed (and much anticipated) financial results. These results were postponed while the supermarket giant investigated how its profits were overstated by £250m. It is expected to tell shareholders that this is an isolated issue, only involving a small group of staff. More here. 8.26am BST Hmmm, European stock markets are making a cautious start to the week. The FTSE 100 is up 8 points at 6317, but the German and French markets have dipped. No reason for exuberance. #Eurozone #inflation expectations in free fall. Infamous EUR 5f5y inflation swap dlvr.it/7GMYgW
Posted on: Mon, 20 Oct 2014 17:47:08 +0000
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