Bank Of England Hit By An Outage That Shit Down Crucial Bank Systems
Please note that we are not authorised to provide any investment advice. The content on this page is for information purposes only.
The Bank of England faced an outage on Monday that led to the shutting down of crucial bank systems. The technical glitch resulted in the closure of a system that can process around £1 trillion worth of transactions daily.
Bank of England hit by an outage
The technical issue that affected the Bank of England affected the real-time gross settlement (RTGS) service. The RTGS service settles financial transactions between banking platforms and financial institutions. On the other hand, the automated Chaps payments system processes high-value transactions such as house sales.
The RTGS service plays a vital role in the UK banking industry, and it also helps promote financial stability. The service can be used to settle over £750 billion on average each working day, with the peaks surpassing $1 trillion in the autumn of last year.
Chaps processes an average of £350 billion daily, with these transactions including the banks paying each other large amounts. People making high-value payments worth millions of pounds to purchase cars and houses can also use the system.
The bank has already announced that the glitch has been resolved. However, the outage has likely led to a backlog of payment settlements the bank must process. The bank also failed to offer details on what might have caused the six-hour outage.
The outage on the Chaps system might have resulted in homebuyers and sellers in the UK being unable to complete their purchases on time. Additionally, the failure of the RTGS system to run might have resulted in delays for banks with settlement accounts with this service. With August being the busiest month to move homes, delays in money transfers might have affected many people.
An update by the bank said, “The issue has been resolved, and all CHAPS payments submitted to the Bank are settling normally. We do not anticipate that there will be any outstanding payments to settle when we close the system this evening.”
While the Chaps system is mainly reliable, it is not the first time it has suffered an outage. In 2014, Chaps suffered a ten-hour outage attributed to issues linked to the routine maintenance of RTGS. The former governor of the bank, Mark Carney, offered an apology at the time, and an investigation was conducted.
Bank of England sets up CBDC advisory team
The Bank of England and the HM Treasury recently set out an open call for academics and researchers to be part of the newly created CBDC Academic Advisory Group (AGG). This group aims to set up “comprehensive and conceptual architecture” for the digital pound.
The central bank is planning to create a multidisciplinary team comprising experts in finance, business, marketing, industrial organization, law, behavioral science, economics, etc. The team will work alongside innovators from the private sector to run proof of concepts and conduct additional experimentation.
