By Tony Hallett, 18 May 2000 00:30
COMMENT A well-run stock exchange is an accountable stock exchange. It sounds obvious, but until yesterday, when the London Stock Exchange (LSE) was put on the spot over a massive systems failure at the beginning of April, that maxim appeared in doubt. The blackout at the LSE was well documented; coming as it did on the last day of the financial year and during a week of plummeting high-tech share prices around the world. Fingers were pointed in the direction of Andersen Consulting, the services firm which runs the exchange's computer systems. Many also noted the irony of fuelling (or that week, rescuing) a high-tech bull-market when IT was preventing shares being traded. The eight-hour meltdown became more sensitive once the merger with Frankfurt's Deutsche Bourse - forming iX-international - became official, and people questioned whether the trading platform could cope. But it wasn't until yesterday that LSE's own role was questioned by a House of Commons Select Committee in Parliament. The LSE claimed dealing hadn't suffered as a result of the unprecedented outage. The Select Committee, backed up by HSBC among others, begged to differ. Badgered by Jim Cousins, Labour MP for Newcastle-upon-Tyne Central, the LSE admitted the systems failure wasn't merely due to below-par software or hardware - four hours of downtime might also have been averted if better business processes had been in place. Ex-Oftel chief Don Cruickshank, the incoming chairman of iX, now says the exchange will consider compensation claims. And with Cousins revealing to silicon.com that the Financial Services Authority will make sure the investigation is brought to a full conclusion, then investment houses, the public and listed companies might just have their faith in the LSE restored.
In order to post a comment you need to be registered and logged in.
Log in or create your silicon.com account below