Bank of England takes control of CHAPS same-day high-value clearing system to "enhance" financial stability

Oliver Gill
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The Bank of England said bringing CHAPS in-house would help enhance financial stability (Source: Getty)

The Bank of England today took control of the direct delivery of the CHAPS same-day high-value clearing system.

CHAPS was previously run by a private company owned by its banking members.

The move followed a decision by the Bank of England earlier this year that "financial stability would be enhanced by moving to direct delivery".

The change brings the UK system into line with the global norm that a central bank or authority takes control of both matching payments and liabilities and the technological infrastructure that underpins it.

Read more: BoE hires Deloitte to lead review into Chaps crash

How does CHAPS work?

(Source: CHAPS)

CHAPS is one of the largest high-value payment systems in the world. It had over 25 direct participants with more than 5,000 financial firms make CHAPS through such firms.

Examples of when CHAPS is used include by City firms to settle money market transactions as well as by solicitors to transfer funds on house purchases. In October 3.8m payments worth £7.5 trillion were made via CHAPS.

Read more: Exec shake-up revealed at top London clearing house

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