The simulated failure of the Chaps wholesale payment system
after a weekend upgrade was just the first headache to face the 80
financial firms and institutions taking part last week in the City
of London's largest disaster exercise.
The first reports of "co-ordinated bomb attacks" in the capital
and the regions came in as staff from the companies were still
grappling with the failure of the money transfer system.
The exercise, which involved 1,000 people from 14 regions in the
UK, was designed to test the resilience of the financial system to
operate as a whole in the event of a major terrorist attack.
But more than half of the firms taking part used the opportunity
to test their own business continuity plans, providing a valuable
insight into how prepared they are for a real attack.
"By bringing the key players and the critical infrastructure in
the finance sector together, plus the fact that many ran their own
business continuity plans at the same time, it really began to give
some lessons on the resilience of the system," said John Sharp,
policy and development director at business continuity
organisation the Continuity Forum.
The simulation, which was co-ordinated by the Bank of England,
the Treasury and the Financial Services Authority, used mock news
broadcasts from on-the-spot journalists to unfold the story.
Businesses had to contend with rumours and false reports, as it
gradually became clear that co-ordinated vehicle bombs in London
and the regions had caused major disruption.
"Had this been a real situation, clearly we would have had
significant infrastructure damage, major problems with transport, a
large number of casualties, and firms would have had to deal with
tricky staff issues," said an FSA spokesman.
The businesses taking part had to decide whether to invoke their
business continuity plans, remain on their premises or move staff
to back-up sites. They were able to seek advice from members of the
City of London Police, the Metropolitan Police and other emergency
services taking part in the simulation.
The firms used a secure website created after the World Trade
Center terrorist attacks to communicate their plans. This allowed
the businesses to give advance warning of when their operations
would be disrupted by staff relocating to back-up sites.
The website, which has been improved since a smaller exercise
last year, sped up the flow of information between firms, enabling
the market to continue to operate smoothly, the FSA said.
Consultancy firms KPMG and Crisis Solutions devised the
simulation, which took a year of planning. KPMG intends to
interview the participants and report early next year on the
lessons learned from the exercise.
Objectives of the simulation
- To practice co-ordination of response to sector-wide disruption
in the financial sector
- To provide an opportunity for participants to test their own
business continuity plans
- To identify areas for improvement and lay foundations for
future exercises
- To test improvements to communications procedures since the
previous exercise in 2004
- To raise confidence and understanding of the roles of the Bank
of England, the Financial Services Authority, and the Treasury in
the event of a major operational disruption.