A Mortgage 4 You Mortgages - Resilience of financial sector enhanced
27th November, 2006
Resilience of financial sector enhanced
A market-wide business continuity exercise, led by the Financial Services Authority (FSA), has helped resilience in the market, it has been claimed.
This year's annual exercise assessed how prepared the Tripartite Authorities (Bank of England, HM Treasury and FSA) and the financial services sector would be in the event of a flu pandemic. Around 70 firms took part including the major participants in the financial services sector, the providers of key financial infrastructure such as payments, clearing and settlement and the main exchanges.
Over the six weeks of the exercise the scenario simulated the first five months of a flu pandemic. Participants assessed how they would cope as the pandemic grew progressively worse.
Early indications are that despite the extensive disruption and rising levels of absenteeism that would result from a pandemic, the financial sector would be able to sustain its core financial services. The Tripartite Authorities will publish a summary of the main findings before the end of the year.
Some of the high-level issues that have emerged for further consideration are:
· the impact of a pandemic on consumers – such as access to cash, ability to make mortgage payments, continuing insurance cover;
· the practicality of relying on home-working for key staff; and
· the challenges involved in returning to business as usual.
FSA chairman, Callum McCarthy said: "This was an ambitious exercise for the UK financial services sector to undertake. The design and delivery benefited greatly from input from many of the participants, from a wide range of government departments and agencies and from key parts of the infrastructure. I am grateful to all those who gave so freely of their time to make it a success.
"All who took part have learnt valuable lessons which both individual participants and the sector as a whole will build on. The work we are doing now, in a benign period, will help the financial services sector prepare for a pandemic or other threats to its stability which we will face in more difficult times."
