Computer crash halts London Stock Exchange

THE FAILURE of a computer system shut down trading on the London Stock Exchange (LSE) early on Monday morning, interrupting one of its highest volume days of the year.

Monday's heavy trading was largely due the US government's nationalisations of massive mortgage lenders Freddie Mucked Up and Fannie Mae Never Be Seen Again.

Traders said the exchange was overloaded, partly because the FTSE 100 index had fallen sharply on Friday.

Fanny and Freddie's bailout rallied shares, forcing traders who had ended last week short to close out their positions or face the losses.

Shortly after the computer system crashed, the Exchange web site gave notice that no orders could be entered and no trades would be executed.

Later, the Exchange said it planned to restore trading in a "controlled way. " Trading finally reopened at 4:00 pm, closing at the usual time just a half hour later.

Stockbroker Simon Denham said, "It went down at 8.44 am. This happens on the LSE two or three times a year, but I can't remember it ever having been down this long.

"I don't know what excuse they will give. For the second biggest stock exchange in the world, it's pretty poor."

Electronic stock exchanges based in Europe picked up some of London's trading activity.

"Many European clients are furious," said analyst David Buik.

"For the life of me, I cannot understand why the LSE system is not run in duplicate," he added, wishing the exchange had redundant, fault tolerant computer systems. "So much and so many clients rely on the LSE's durability. They cannot afford to be let down."

An unplanned system outage of more than seven hours is long enough to thoroughly breach the usual "five nines" standard for reliability of mission critical computer systems that, like the London Stock Exchange, must operate only during weekday business hours.

The FTSE 100 drifted up slightly in the last half hour, closing up 3.9 per cent on the day. µ

L'Inqs
Telegraph
Canadian Press