One of the UK's largest financial clearing houses suffered a 'major' IT outage on New Year's Eve last year, a new report from the Bank of England has revealed.
LCH.Clearnet, which last year cleared around 50% of the world's interest rate swap transactions, was temporarily unable to process payments as a result of the outage, the BoE's 'Payment Systems Oversight 2012' report revealed yesterday.
"The nature of the problem created obstacles to reverting to contingency arrangements and also hindered internal and external communication," the report said. "All systems were restored by the early evening of 31 December and payments settled as normal."
The annual report, which reviews payment systems in the UK, said that the international clearing house's outage was "satisfactorily resolved" on the day it occurred.
LCH.Clearnet declined to say what cause the IT outage but confirmed in a statement that is investigating the incident.
“The incident was fully communicated to regulators, exchanges, members and clients at the time," it said. "We identified the issue and took measures to ensure this doesn’t happen again. There were no financial losses as a result.”
Clearing houses such as LCH.Clearnet provide stability to financial markets by monitoring trades between financial institutions. In its report, the BoE said payment systems require "robust contingency arrangements to minimise disruption to payment services in the event of an operational failure".
The report said that recognised payment systems had "generally demonstrated high levels of operational availability over the past twelve months".
However, also reealed that the financial messaging system SWIFT, which provides a network that enables financial institutions worldwide to send and receive information about security financial institutions, suffered an outage in July 2012.
"SWIFT has assessed the lessons and is progressing work to reduce the risk of similar incidents occurring in future," it said. "For example, it is undertaking a targeted review to identify other potential latent issues."