Plans by the government to introduce legislation to tackle
the effect of a major electronic attack on the UK’s financial
markets are unnecessary, analysts have warned.A Treasury
green paper, announced on 25 February, highlights the possibility
of IT problems such as a computer bug or virus incapacitating stock
exchange or other systems.
The
Financial System and Major Operational Disruption paper talks of
contingency plans for IT related problems, including virus attacks
or software flaws, a 11 September-style terrorist attack or even
severe adverse weather conditions.
“The core
question is whether in principle, it would be useful to have new
legislation to help promote order in the financial system in the
face of major operational disruption,” it said.
Financial
markets should take the lead in ensuring that they have adequate
safeguards against threats to their infrastructure, the paper
added.
But
analysts questioned the need for the legislation. Most of the
larger market institutions already have sophisticated technology in
place to guard against electronic attacks, and avoid a single point
of failure.
“What does
the government know?” said Duncan Brown, consulting director at
analyst firm Ovum. “Everyone in financial services understands the
risk of electronic attack.”
The green
paper also suggests two powers to suspend certain financial
obligations: provide a breathing space; and a power to direct
financial “infrastructure’’ such as exchanges, clearing houses,
settlement systems and payment systems. This would provide a means
of interventions, but only in formal markets and systems at the
heart of the financial system
Additional reporting by Nick
Huber