Bank of England reprimands Euroclear over malfunction
The Bank of England has taken supervisory action against Euroclear UK and Ireland after its CREST financial markets system crashed, it announced on Friday.
The malfunction resulted in the Bank of England delaying purchases of government bonds through its bond buying programme.
“The outage was caused by an issue with messaging software which resulted in a discrepancy within the settlement system”, the Bank said.
Euroclear UK and Ireland has been ordered to implement the recommendations of an independent reviewer.
The Bank’s investigation into the outage has concluded, noting that it “has now fully reviewed the incident.”
Euroclear UK and Ireland’s CREST system encountered technical issues on Friday, 11 September. The system suffered further problems the following Monday, but full settlement services were restored that afternoon.
A Skilled Person has been appointed to oversee Euroclear UK and Ireland’s compliance with the recommendations, the Bank noted.
A Euroclear spokesperson said: “In 2020, Euroclear UK & Ireland (EUI) experienced disruption to its CREST settlement services. EUI conducted extensive investigations and appointed external experts to conduct an independent review. This formed the basis of a detailed action plan to implement recommendations from the review.
“Euroclear has kept the regulator, clients and stakeholders informed of the review process and the resulting recommendations, which are now being implemented.
“Today the Bank of England issued a directive to EUI under section 191 of the 2009 Banking Act. This notice formally requires EUI to implement a number of the recommendations already outlined in its action plan. EUI is fully committed to implementing these changes and in fact a number of the recommendations have already been executed. We will continue to work with clients and other financial market participants to implement these recommendations and to further strengthen EUI’s business resilience’.
Read more: ‘Stablecoin’ payments must be regulated like banks, says Bank of England