Currency trading costs jumped during November's CME outage, SNB report says

LONDON, Feb 24 (Reuters) - The cost of trading euro/dollar, the world's most actively traded currency pair, rose sharply in late November when a failure at a data centre caused the temporary suspension of operations across multiple CME group exchanges, a Swiss National Bank report on Tuesday showed.

The roughly 11-hour outage, which CME said was caused by a cooling failure at a Chicago data centre, halted trading across stocks, bonds commodities and currencies. It hurt currencies by taking out the CME FX futures exchange and the EBS FX trading venue.

Key findings of the SNB report:

• The spread for euro/dollar, EUR=EBS i.e. the gap between the price at which someone is willing to buy euros and the price at which someone is willing to sell euros, increased by between three and eight times. Spreads are a key gauge of trading conditions in FX, with wider differentials signalling higher transaction costs.

• Dollar/Swiss franc CHF=EBS and euro/Swiss spreads EURCHF=EBS also widened. The EBS platform is the primary trading venue for euro/dollar and both Swiss franc pairs, and their CME futures contracts are actively traded.

• Spreads on currencies like sterling/dollar that are more actively traded on LSEG's matching platform than EBS also widened, but by less, widening two to five fold. Currencies that trade on LSEG and do not have CME futures were unaffected.

• However, despite the higher transaction costs, FX trading remained possible at all times, the SNB found, suggesting trading at least partially moved from EBS to secondary venues.

CME did not immediately respond to an emailed request for comment.