(Adds update from Euroclear)
LONDON, Sept 14 (Reuters) - The CREST financial markets
settlement system, which sits at the heart of more than 1
trillion pounds' ($1.29 trillion) worth of daily share and bond
trades, suffered more technical problems on Monday, forcing the
Bank of England to delay a gilt buy-back.
CREST's owner, Euroclear, reported intermittent delays which
it believed were related to back-up procedures that it had to
take on Friday when the system experienced an outage.
"We are closely monitoring the situation and taking actions
to resolve any issues with the utmost priority," Euroclear said.
Euroclear said late in the afternoon that a full settlement
service had resumed.
CREST is the central securities depository for share and UK
government bond markets in the United Kingdom and for Irish
stocks.
The BoE had been due to hold a regular 1.5 billion-pound
buy-back of British government bonds on Monday as part of its
programme to help the economy cope with the coronavirus shock.
"Due to ongoing technical problems in CREST settlement, the
Bank announces that it will not hold gilt purchase operations
today," the BoE said early on Monday.
A banker involved in the sale of government bonds said the
problems had not caused significant disruption but needed to be
fixed before the government's next scheduled sales of bonds on
Tuesday at which it is seeking to raise 4.5 billion pounds.
"They need to look into it urgently," the banker said.
A spokesman for the Debt Management Office said its business
operations were continuing as normal, "including the auctions
currently scheduled for tomorrow".
CREST first went down on Friday after suffering technical
issues, requiring the BoE to switch to back-up procedures to
settle transactions.
Owner Euroclear said on Sunday the system would reopen early
on Monday in time for the reopening of financial markets.
A spokeswoman for the BoE said the central bank had decided
"as a precaution" to delay Monday's short-maturity gilt purchase
operation until Thursday. Gilt purchase operations due to take
place on Tuesday and Wednesday were unaffected.
There was no impact on consumer payments, the BoE said.
A Western security source said he was unaware of any hostile
activity such as a cyber-attack on CREST.
($1 = 0.7782 pounds)
(Additional reporting by Abhinav Ramnarayan, Guy Faulconbridge
and Huw Jones; Writing by William Schomberg; Editing by Toby
Chopra, Kirsten Donovan)
