Britain's bank payments system returned to operation after a suspension for most of the day that held up fund transfers and delayed house purchases.
The Bank of England had halted transactions via its Real Time Gross Settlement system after uncovering a fault during routine maintenance at the weekend. The system handles 575 billion pounds ($928 billion) of daily payments between the country's banks, including the same-day electronic funds transfers used by homebuyers.
The BOE said in a statement it will extend operational hours until 8:00 p.m. London time "to maximize the opportunity for settlement."
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The system, which also powers the mechanism on which securities transactions are settled, was suspended at 6:00 a.m. The central bank was processing the most important payments manually during the shutdown.
The RTGS runs the Clearing House Automated Payment System, which is used for high-value wholesale transfers and other time- sensitive payments such as house purchases. On average, there were about 3,200 home sales each working day in the six months through June, according to Bloomberg calculations using U.K. Land Registry data.
The operator, CHAPS Clearing Co., said in it a statement that it is now working to clear the backlog after earlier being unable to process payments. It's "confident that all payments submitted today will be processed today," it said in a statement. It will extend operating times until 7.40 p.m.
RTGS settles all major sterling interbank payments and was described in a 2012 BOE report as a "critical component" of the financial system that transfers the equivalent of the U.K.'s annual gross domestic product every three days. The central bank said in 2011 that U.K. banks may experience liquidity restrictions within an hour if a lender stopped or reduced its transfers through CHAPS.
The RTGS also runs CREST, operated by Euroclear U.K. & Ireland Ltd. and used to settle exchange-traded and over-the- counter securities transactions.
Bloomberg News
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