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Wednesday, 19 July, 2000, 20:04 GMT 21:04 UK
Frankfurt ponders trading breakdown
Xetra trading system İDeutsche Börse
A three-hour collapse of Deutsche Börse's Xetra trading platform on Tuesday has angered German banks and raised questions whether the software should be adopted in London after the planned merger of Frankfurt and London stock exchanges.

The electronic share-trading system suffered a software crash at 1510 Frankfurt time and came back online only after more than three hours, at 1830.

Exchange officials blamed "an error in the operating system software". The error blocked the system to look up files "which handel the access rights for the electronic trading system", effectively crashing the system.

Deutsche Börse board member Volker Potthof said the system had not fulfilled "the high standards we demand".

German brokers reportedly complained that the exchange had failed to update them about when trading could resume.

A spokeswoman for the exchange argued that it had not been possible to predict how long the system would be out of order.

Reliable Xetra

The Xetra system was introduced in November 1997, and Tuesday saw only the second time that trading had to be interrupted.

It handles about 80% of all share trading in Germany, and up to 90% of trading in blue-chip stocks listed in the 30-share Dax index.

But the crash has tarnished the reputation of the software, which had been billed as superior and more reliable to rival systems, especially London's Sets.

In April, the London Stock Exchange did not open for nearly eight hours because of a software problem on what should have been one of the busiest trading days of the year.

When the Frankfurt and London stock exchanges negotiated their merger plans, both sides agreed to adopt the Xetra platform across the new iX (international exchange) venture.

Smaller brokerage firms are unhappy that they will be forced to fork out money for a new trading system just 10 years after the costly introduction of Sets.

Xetra's problems could persuade them to vote against the merger deal.

Nonetheless, many brokers still believe that a switch from Sets to Xetra will bring them a more reliable system.

And the system that failed in Frankfurt, will not be the one that is going to be installed in London.

iX officials say the Xetra platform will be "developed and enhanced " by December 2001, when the exchanges are set to merge.

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See also:

06 Apr 00 | Business
London trading: what went wrong?
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London shares chaos
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Rival global exchange planned
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Europe plans a global stock market
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