CREST problems force Bank of England to delay gilt buy-back

© Reuters. The Bank of England is seen in the City of London, Britain

LONDON (Reuters) – The CREST financial markets settlement system, which sits at the heart of more than 1 trillion pounds’ ($1.29 trillion) worth of daily share and bond trades, suffered more technical problems on Monday, forcing the Bank of England to delay a gilt buy-back.

“Due to ongoing technical problems in CREST settlement, the Bank announces that it will not hold gilt purchase operations today,” the BoE said.

Shortly afterwards, Euroclear said the problems had been resolved.

CREST is the central securities depository for share and UK government bond markets in the United Kingdom and for Irish stocks, settling trades as the final leg of a transaction.

The BoE had been due to hold a regular 1.5 billion-pound buy-back of British government bonds on Monday as part of its programme to help the economy cope with the coronavirus shock.

CREST first went down on Friday after suffering technical issues, requiring the BoE to switch to back-up procedures to ensure settlement of transactions.

Owner Euroclear said on Sunday it would reopen early on Monday in time for the reopening of financial markets.

Euroclear said on Monday it had identified the cause of the new outage which was not related to Friday’s one.

On Saturday, Euroclear said it had no reason to suspect a cyber attack.

A spokeswoman for the BoE said the central bank had decided “as a precaution” to delay Monday’s short-maturity gilt purchase operation until Thursday. Gilt purchase operations due to take place on Tuesday and Wednesday were unaffected.

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There was no impact on consumer payments, the BoE said.

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