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Bloomberg system failure leads to postponed £3 billion auction

Bloomberg’s computer failure has cost the UK Debt Management Office a good few days of time, after it announced an auction for Treasury bills in order to raise £3 billion.

The series of short-term auctions allow investors to acquire Treasury bills, where the government pays the investor back for the original amount and additional interest. It is a smart way to make some quick money for people with £10,000 spare, especially when the economy is showing form.

It is one of the first times the DMO has suspended an auction, but Bloomberg is a significant source for bond markets, beating out rivals like Reuters. Several traders reported the issue to the DMO, who dropped all of the previous auctions.

That means any prior bids already tendered are no longer valid.

"We experienced a combination of hardware and software failures in the network, which caused an excessive volume of network traffic," Bloomberg said in a statement. "This led to customer disconnections as a result of the machines being overwhelmed. We discovered the root cause quickly, isolated the faulty hardware, and restarted the software. We are reviewing our multiple redundant systems, which failed to prevent this disruption."

The Bank of England made a statement claiming that it has all the tools to carry out “financial stability, and provision of market liquidity” when required by the DMO. Bloomberg also released a statement reporting on the technical issues, which have been fixed.

The issue appears to have come from redundant systems in use by Bloomberg, which lead to a bottleneck in traffic taking the computer system offline. No external source attacked the Bloomberg Professional trading platform, meaning there should be no investigation into the disturbance.

Michael Allen, Solutions VP for Dynatrace, comments: “The Bloomberg outage shows just how critical digital performance management is to today’s financial institutions. The markets were flung back to the dark ages with a single outage, with reports indicating that the UK government actually had to postpone a £3 billion debt sale.

"Typically Bloomberg is a very stable application, so this shows that even the most robust of applications can sometimes suffer from performance issues.

"This is why businesses need to have visibility into the entire application delivery chain to ensure that if a problem occurs then the root cause can be identified and fixed quickly. Failure to do so can create chaos and, as evidenced, can even impact global markets.”