Consultation on recovery law closes

Legislation to deal with the after-effects of a major electronic attack on UK financial markets has moved a step closer. The...

Legislation to deal with the after-effects of a major electronic attack on UK financial markets has moved a step closer. The consultation period on a Treasury green paper announced in February, which highlights the possibility of IT problems such as a computer bug or virus incapacitating stock exchange or other systems, has closed.

The Financial System and Major Operational Disruption Green Paper discussed contingency plans for IT-related problems, including virus attacks or software flaws, a terrorist attack or even severe weather conditions.

"The core question is whether, in principle, it would be useful to have new legislation to help to promote order in the financial system in the face of major operational disruption," the paper said.

Financial markets should take a lead in ensuring that they have adequate safeguards against threats to their infrastructure, it added.

But analysts questioned the need for legislation. Most of the larger market institutions already have sophisticated technology to guard against electronic attacks and avoid a single point of failure.

The green paper also suggested powers to suspend certain financial obligations to provide a breathing space, and a power to direct financial "infrastructure'' such as exchanges, clearing houses, settlement systems and payment systems.

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