Barclays Bank has blamed a "technical breakdown in the UK clearing system" as the reason the bank needed to borrow heavily from the Bank of England's emergency reserves.

This is the second time the bank has used the Bank of England’s emergency facility in the last two weeks.

Barclays said its need to borrow was not a reflection on the state of its balance sheet. "The Bank of England sterling standby facility is there to facilitate market operations. Had there not been a technical breakdown, this situation would not have occurred."

A spokesperson described the borrowing as standard market practice and said the technical fault that led to the emergency borrowing was not the result of a failure in Barclays’ systems.

Problems in the City began at 2pm on Wednesday (29 August), when the interface - a proprietary secure link - between Crest, the UK settlements house, and the real time gross settlement (RTGS) system of the Bank of England, broke down for an hour.

Dennis Peters, a spokesperson for Euroclear, the owner of Crest, said the outage was addressed and the deadline for input settlement instructions was extended for an hour, from 4.10 to 5.10pm. "The extension provided more than enough time for market to manage cash and security balances. No client reported any issues on settlement activity for that day," said Peters.

Peters refused to give further details on the nature of the technical break down, but said it was unlikely to recur. The link between the clearing house and the Bank of England ran “as normal" on Thursday (30 August) and today (Friday), he added. The same network is also used to link Crest with other European reserve banks.

The Bank of England's standing facility allows lending institutions to borrow unlimited amounts of money, but they must pay one percentage point above the base rate.

The facility has been tapped 14 times in the past year. Some reports claimed that Barclays borrowed £1.55bn. Bank of England confirmed that the standing facility issued £1.55bn, but would not disclose the banks that used the facility.

It is not uncommon for banks to use the Bank of England’s emergency facility, however, on only three occasions did the borrowing reach over the billion mark.