Mark Carney launches investigation after real-time payment system crash delays house purchases

Bank of England Governor promises ‘thorough, independent review’ after Real Time Gross Settlement payment system, which processes 277bn a day, resumes operations after being down for 10 hours Mark Carney has launched an investigation into how one of the central pillars of the UK’s payments infrastructure collapsed for 10 hours, delaying hundreds of billions worth of deals.
The Bank of England Governor pledged to discover what had gone wrong and whether officials had responded properly after the enforced closure of the 277bn-a-day CHAPS payment system, which affected thousands of house purchases and major interbank money transfers.
The Bank said it would be carrying out ‘a thorough, independent review of the causes of today’s disruption’. ‘The review will cover the causes of the incident, the effectiveness of the Bank’s response and the lessons learned for future contingency plans. Its findings will be presented to Court which will then publish the full report and the response,’ it added.
MPs had earlier in the day called on the Bank to explain the fault, attributed to a ‘technical issue related to some routine maintenance’.
The system was kept open four hours after its usual closing time on Monday evening to deal with a backlog of transactions – including the purchase of 2,450 homes – following what is believed to be the biggest shutdown in its 30-year history.
At 6am, part of the Bank’s overarching Real Time Gross Settlement payment system (RTGS), which processes transactions between banks, had been taken offline, leading in turn to the failure of the Clearing House Automated Payments System (CHAPS), responsible for high-value payments and housing deals.
The two systems play a crucial role in the UK payments structure, settling large deals and time-sensitive transactions such as house purchases, between banks. After RTGS was taken down – following an update that it was feared would cause it to malfunction once live – operations were not resumed until around 4pm.

This post was published at The Telegraph on 20 Oct 2014.