If a Week is a Long Time in Politics, How Much Longer is it in Banking?
If a week is a long time in Politics...........
Last Thursday the 21st of June, Reuters reported that credit ratings agency Moodys downgraded the credit ratings of a dozen banks across Europe, including three in the UK Barclays, HSBC and the Royal Bank of Scotland (RBS), parent of Natwest and Ulster Bank and what was once proudly claimed to be Britains biggest banking group.
What effect this would have on the banks' customers was swiftly overtaken as RBS group proceeded to apply a software upgrade to its systems which went horribly wrong, leaving millions of people and companies without any banking facilities for up to five days.
NatWest and Royal Bank of Scotland warned their 12 million customers that a ‘computer glitch’ that has prevented them from paying bills or moving money could go on for another 48 hours, making the week-long crisis the UK’s longest ever bank computer failure. The banks, which are both part of RBS Group and are 82% owned by the taxpayer, refused to give a detailed explanation of the causes of the crisis, despite the Financial Services Authority (FSA) and desperate consumers demanding answers.
One commentator described the chaos which has ensued as equivalent to a motorway pile up. Although the original accident is now cleared, the backlog of transactions which are still waiting to be processed will take days or even weeks to clear.
Sir Mervyn King, the governor of the Bank of England, said there would be a "very detailed" investigation into the issues. “It’s still going to take time for it to catch up, to get back to normal,” Sir Mervyn said, adding that the Financial Services Authority will “go in to find out what went wrong and why it took so long to recover”.
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