Bloomberg's global outage paralyses investors

Bloomberg terminals suffered an unprecedented global outage on Friday, disrupting trading from Hong Kong to London and paralysing investors for whom its screens have become the central nervous system of finance.

The UK Debt Management Office was forced to delay a planned £3bn Treasury Bills auction and some users' distinctive black and orange screens went dark for six hours as Bloomberg raced to fix a combination of hardware and software failures that it said had "overwhelmed" its network.

The high-profile incident attracted the attention of regulators as it highlighted how dependent traders and investors have become on the financial information company Michael Bloomberg founded after leaving Salomon Brothers in 1981.

The Bank of England and the UK Financial Conduct Authority both said they were monitoring the impact of the outage, which saw volumes in government bond futures on Eurex fall about a third from normal levels.

Bloomberg's mission of providing pricing data for often opaque markets, its expansion as a trading platform and its chat service that has become ubiquitous on trading floors has made its more than 315,000 customers increasingly reliant on the service.

Some large Bloomberg customers such as Goldman Sachs have begun to push back against the cost of its $20,000-plus annual subscriptions by backing new instant messaging ventures and alternative data providers.

The outage started around 8.30am London time, coinciding with the close of trading in Asia and the open across Europe. By 10.45am most terminals were back up and running and by 4pm Bloomberg said service had been fully restored.

However, in the period offline any tenders submitted for the UK Treasury Bill tender were deemed null and void. The DMO rescheduled the tenders for Friday afternoon.

The company said there was no indication that it had fallen victim to a hacking attack. It added that it was reviewing its "multiple" back-up systems, which had failed to prevent the disruption.

Bloomberg users turned to social media to express their frustration and joke about the outage.

Philip O'Sullivan, chief economist for Ireland at Investec, tweeted: "Bloomberg being down has finally made me understand how teenagers feel when Facebook crashes."

People within Bloomberg said reporters were staring at blank screens during the outage and had been told not to talk about the outage or further clog the system by logging in. Asked if people were twiddling their thumbs, one person said: "We aren't twiddling our thumbs, we are panicking."

Founded to provide real-time financial information, Bloomberg terminals have become the leading trading and communication platform for traders, salespeople and investors.

Burton-Taylor International, an information industry consultancy, estimates that Bloomberg widened its lead over Thomson Reuters in 2014 to take 32 per cent of the $26.5bn financial data market, compared to its closest rival's 25.9 per cent.

In Europe, its trading venue accounts for 37 per cent of all electronic trading of government bonds, and around 70 per cent of investment grade credit bonds. But rivals have often complained that Bloomberg is at an advantage because it is classified as a service provider and not a "multilateral trading facility (MTF)".

The latter designation would bring obligations including introducing policies to prevent conflicts of interest and to monitor trading activity for abuses. Bloomberg says it is not an MTF because it does not match bids and offers, just publishes them and allows buyers and sellers to communicate.

A trader in Hong Kong said there could be some reputational damage for Bloomberg but he doubted this would significantly bolster its rivals.

"The markets are so overexposed to Bloomberg," he said. "It's a serious issue but hard to overcome, so many people are married to it."

He added that Bloomberg was the incumbent and virtually all sales people have their chats there. "It's hard for others to get the critical mass. People are used to the codes and it's all familiar."

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