BOE Payment System Chaps Crashes

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 about £277bn of transactions daily – failed to open as usual at 6am.

Estate agents were among the first to report concerns, with one describing how an 88-year old woman was ready to move and had the contents of her house packed up on the driveway when the payment problem hit.

The Bank said the retail-time gross settlement system (RTGS) had been hit by a technical issue and could give no indication of when it might be resolved. The largest, most crucial payments would be processed manually into computers by staff at the Bank.

This so-called Chaps system – which stands for clearing house automated payment system – processes 92% of transactions between banks and is used to process large-value transactions, such as house purchases. The average payment is £2.1m.

Andrew Montlake, at the mortgage broker Coreco, said: “If there are going to be Chaps issues then we won’t know yet – transfers usually need to be done by 3pm if someone is to complete on that day. It’s worth adding that Monday is not the biggest completion day – Fridays tend to be the most popular day.”

via The Guardian

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza