LSE back to 'normal' after tech crash
But remains quiet on problem.
By Computerworld UK reporters | Computerworld UK | Published: 09:26, 09 September 2008
The London Stock Exchange (LSE) began Tuesday trading "as normal", a day after a network problem brought trades to a standstill.
Trading commenced as normal from 8am, without technical problems, an LSE spokesperson said. The nature of the connectivity problems that forced the exchange offline on Monday have still not been disclosed.
All the LSE wouild say was to repeat assurances that the problems were not on its TradElect platform.
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Speculation is rife in the morning newspapers that the weight of trades had overloaded the LSE technology, following heavy activity after the effective nationalisation of US mortgage lenders Fannie Mae and Freddie Mac. The LSE only operated for the final half hour of Monday, causing some angry traders to discuss moving to other rival markets.
Trading started at 4pm Monday after market participants reconnected to the system and activity was allowed to recommence. The failure, which started at 8.45am on 8 September, forced the market to operate in "auction mode", meaning traders could decide prices and agree sales, but not settle trades.
Traders had been expecting a frantic day's activity as the markets reacted to the dramatic takeover of US mortgage groups Fannie Mae and Freddie Mac by the US authorities. Instead the LSE, which is facing mounting pressure from rival exchanges, was left with egg on its face.
Analyst firm Tower Group said the exchange should provide a full explanation of the failure. Bob McDowall, research director of analysts Tower Group said: "This is very damaging to the LSE reputation and to London as a financial centre for trading equities."
"Tower Group would expect the LSE to provide a full non-technical but detailed explanation of the reason for this interruption to all its stakeholders - users/shareholders/ investors. The LSE will almost certainly lose competitive advantage to the alternative trading systems (Turquoise/Chi-X) and even other global exchanges."
The breakdown occurred just days after the LSE announced plans to improve services as it competes against a range of new entrants into the market.
