Bloomberg IT Collapse Paralyzes Stock Market

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( — April 18, 2015)  — In digital era of global trading in milliseconds, a day-long pause means losing millions. Global stock traders were sent back through time when Bloomberg system crashed Friday morning through the afternoon CET. Because of the time difference, the software crash mostly hit the EU traders who are dependent on Bloomberg Stock Monitoring system.

For one day, traders at London’s ‘City’ – New York’s Wall Street counterpart – were forced to yell over the telephone, at least those ‘old wolfs’ who still remembered how to do that. Most of the traders, however, were simply paralyzed without the data provided by Bloomberg stock monitoring system. The ‘IT meltdown’ even forced the UK government to postpone a £3bn debt sale, the Guardian reported.

The problems with the terminals occurred around 8.20am, the time when Asian markets closed and Europe’s opened.  Around that time, the Bloomberg’s IT system crashed leaving more than 300,000 traders on world’s financial markets without the crucial data.

“The modern way of getting a trade done is through Bloomberg chat, so without it, traders were a bit at a loss,” said Jasper Lawler of City firm CMC Markets. “Of course there is always a telephone if the deal is urgent.”

Peter Gorra, a senior foreign-exchange trader at BNP Paribas in New York, said they “went ‘old school’ and picked up the phone,” Mr. Gorra said. “It was an orderly market where people didn’t panic,” the Wall Street Journal reported.

Traders of government bonds as well as shares and other financial instruments use the US Bloomberg information displays to monitor stock markets, the Guardian reported. According the newspaper, Bloomberg service is so important that the breakdown prompted the Financial Conduct Authority to monitor the impact on the firms it regulates.

The Bank of England reassured markets it had not been affected, saying it had all the tools needed to ensure financial stability and to provide market liquidity if needed.

The financial monitoring giant Bloomberg, which is run by former New York City Mayor Michael Bloomberg, has more than 325,000 terminal subscriptions globally, costing about $20,000 a year, Wall Street Journal reported. According to the chief investment officer at London-based asset manager LNG Capital Louis Gargour, Bloomberg screens “become vital to the sharing of information across regions and counterparties.”

“A global outage like this is systemically important to markets all around the world,” he said, adding that during the outage, he was “flying blind” and “catching up on ‘admin’ because there is little else that we can do.”

“I haven’t seen it go down like this for 10 or 15 years,” said Steve Collins, global head of dealing at asset management firm London & Capital.  “Bloomberg is usually the one stable thing; it’s the thing that everyone can’t live without,” he said.

The system was fully restored around 4pm, but the entire trading day was lost.

“Service has been fully restored. We apologize to our customers for the disruption,” Bloomberg posted on Twitter Friday afternoon.

Bloomberg blamed a combination of hardware and software failures after City dealers took to Twitter to lament the blackout.

“We experienced a combination of hardware and software failures in the network, which caused an excessive volume of network traffic. 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,” Bloomberg said.

The real proportion of the impact to traders and companies is yet to be analyzed, yet the Bloomberg ‘IT meltdown’ showed how fragile and Internet-dependent the global financial market has become.