Glitch causes 4 billion euro overdraft
April 12, 1999
by Mary Lisbeth D'Amico
MUNICH (IDG) -- Although the January switch to the single European currency was smooth at most European banks, a prominent German discount bank and its customers this week were acutely aware that not all possible euro-caused glitches have been found.
Customers of Bank 24, a discount bank owned by Deutsche Bank AG, were astonished Tuesday evening to find that their securities accounts appeared to be overdrawn to the tune of 4 billion euro ($4.32 billion). An oversight connected to the change to the euro was responsible for an error this week, which affected 55,000 customers.
Open around the clock, discount banks allow customers to either phone in or electronically conduct bank transactions via the Internet. Customers forgo extras like financial advice but are charged much lower charges than at a full-service bank.
The problem, which cropped up Tuesday, had to do with a quarterly calculation of the worth of each customer's securities account, according to a Bank 24 spokeswoman. Since the January switch to the euro, Bank 24 has allowed customers to list their accounts in either euro or marks, the spokeswoman said. The glitch only affected the bank's euro customers.
But the problem actually had more to do with human error than with a bug in Bank 24's software, she said. Although the bank had tested and planned to use a new, euro-compatible program to carry out the quarterly calculation, because of human error, the old, pre-euro program calculated the amount.
The error was quickly discovered, and the accounts were back to normal by Thursday, with essentially no damage done.
Bank 24 has now made sure that, in the second quarter, the appropriate program will be used to make the calculation and avoid the problem in the future. The problem doesn't affect any other banks, as it was caused by internal software, the spokeswoman said.
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