Cory Levine, Wall Street & Technology
While I was eating leftover turkey last week, London's Financial Services Authority (FSA) completed a resiliency test of its financial markets and found that in the event of a bird flu pandemic, the backbone of the U.K. economy would be able to continue operating.The test, conducted on behalf of the U.K.'s Tripartite Authorities (FSA along with Bank of England and HM Treasury), assessed both the regulator's preparedness as well as that of major market participants. The FSA reports that 70 firms participated, including key infrastructure providers including payments, clearing and settlement, and major exchanges.
The exercise lasted six weeks and simulated the first five months of a flu pandemic. Participants were asked to assess their response as the pandemic grew progressively worse over the simulated time period.
Early results suggest that the financial market would successfully sustain its core services in the event of a pandemic. A summary of the main findings will be published before year-end.
This test, in purpose, is not unlike annual business continuity planning tests conducted on U.S. financial markets, But like stateside tests, similar questions arise about the effectiveness of BCP testing. In a pandemic scenario, securities firms wouldn't have the luxury of knowing when the event would happen, which employees would be affected, and how their counterparties and business partners would be involved.