Page last updated at 12:05 GMT, Tuesday, 9 September 2008 13:05 UK

Software blamed for LSE failure

London Stock Exchange sign
The London Stock Exchange says its computer problems have been fixed

The London Stock Exchange (LSE) says a computer software glitch was the reason trading was paralysed on Monday.

Traders could not connect to the LSE's system for nearly seven hours, wiping out most of the day's trading.

Business resumed this morning and without incident, but the exchange missed out on what could have been one of its busiest days of the year.

It comes at a time when the LSE is facing increasing competition from new rival exchanges.

A spokeswoman for the LSE said the problem had now been fixed.

She denied that the problem had been related to the high volume of trading first thing in the morning.

Strong trading had been predicted for London and other European markets on Monday after the US government stepped in to rescue troubled mortgage firms Fannie Mae and Freddie Mac over the weekend.

New rivals

Since new European Union rules came in last year, the LSE no longer has a monopoly on share trading and new rivals have sprung up.

One of their competitors, Chi-X, said the incident highlighted that the system needed a "root and branch change", with trading prices taken from a variety of sources.

Its chief executive Peter Randall said: "We've newer software and more modern technology and offer real time market data for free."

Another rival, Turquoise couldn't have hoped for a better publicity coup for its service in the first week of its operation.

"This emphasises the real need and opening for alternative platforms," a spokesman for Turquoise said.

He added that Turquoise had put a great deal of time, effort and investment into the resilience of its computer systems.

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