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BNY Mellon Reports another Large-Scale Technological Failure

Bank of New York Mellon Corp., which serves as custodian for many mutual funds, reported a technological outage that left the bank unable to timely process client payment instructions through Swift, a funds transfer network, for several hours between December 4-5, 2016. According to a Wall Street Journal report, the incident affected institutions that use BNY Mellon to make hundreds of billions of dollars of payments on their behalf by sending messages over Swift. The WSJ reported that once BNY Mellon discovered the problem, a technology vendor eventually helped the bank to restore its system. The WSJ report also noted that the bank has drawn scrutiny from supervisors at the Federal Reserve for its large market share as a payment and settlements provider. In August 2015, a technological failure in BNY Mellon’s accounting systems left it unable to calculate closing prices for hundreds of mutual funds.