21 Oct 2014
The Bank of England’s (BoE) Real Time Gross Settlement (RTGS) system crashed on Monday, causing severe delays to business transactions and the property sector.
Processing around £277 billion of transactions daily, the RTGS system failed at 6am and was first reported by estate agents. It was fixed and reactivated by 4pm.
The BoE promised an independent investigation into the situation, saying: ‘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’.
A key feature of RTGS is known as the Clearing House Automated Payment System (CHAPS), which processed £70 trillion in 2013. Estate agents use CHAPS to process up to 92% of the large transfers between banks during property sales and purchase.
With the system only usually operating until 4pm daily, CHAPS managing director, Phil Kenworthy, promised: ‘CHAPS will be extending its operational day to enable its participants to submit and receive CHAPS payment instructions later than normal’.
It took four hours for the backlog of 143,000 payments to finally go through the system on Monday evening, making it possibly the longest outage of CHAPS since its inception in 1984.