A new method to perform direct numerical simulations of wall-bounded flows has been developed and implemented. The method uses high-order compact finite differences in wall-normal (for channel flow) or radial direction (for pipe flow) on a collocated grid, which gives high-accuracy results without the effectfof filtering caused by frequent interpolation as required on a staggered grid. The use of compact finite differences means that extreme clustering near the wall leading to small time steps in high-Reynolds number simulations is avoided. The influence matrix method is used to ensure a completely divergence-freesolution and all systems of equations are solved in banded form, which ensures an effcient solution procedure with low requirements for data storage. The method is unique in the sense that exactly divergence-free solutions on collocated meshes are calculated using arbitrary dffierence matrices. The code is validated for two flow cases, i.e. turbulent channel and turbulent pipe flow at relatively low Reynolds number. All tests show excellent agreement with analytical and existing results, confirming the accuracy and robustness ofthe method. The next step is to eciently parallelise the code so that high-Reynolds number simulations at high resolution can be performed. We furthermore investigated rare events occurring in the near-wall region of turbulent wall-bounded flows. We find that negative streamwise velocities and extreme wall-normal velocity uctuations are found rarely (on the order of 0:01%), and that they occur more frequently at higher Reynolds number. These events are caused by strong vortices lying further away from the wall and it appears that these events are universal for wall-bounded flows. / <p>QC 20150303</p>