Financial Markets Prepared For Disasters, But Not Pandemics - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Business & Finance
12:41 PM

Financial Markets Prepared For Disasters, But Not Pandemics

A GAO report urges market organizations to complete plans for pandemics and further improve telecommunications systems.

U.S. financial markets have made significant progress in terms of disaster preparedness, a recently report has found.

The Government Accountability Office released a report (PDF) Tuesday stating that the country's seven critical financial market organizations have increased their ability to withstand widespread disaster. The report analyzed actions that the organizations have taken to prevent attacks and pandemics, recovery and response plans, telecommunications resiliency and regulators' efforts to improve market resiliency.

The GAO, which has issued several scathing reports of government preparedness, found that exchanges, clearing organizations, payment system processors, brokers, dealers and banks have reduced potential for operational risks from telecommunications outages. The report praised the organizations for practicing emergency preparedness scenarios, creating disaster and recovery plans, increasing physical security and setting up telecommunications and technology systems that are less likely to be completely disabled in the event of an attack.

Still, it strongly urged market organizations to complete plans for pandemics and further improve telecommunications systems. Specifically, GAO urged mapping circuit routes and determining how widespread telecommuting would impact network capacity.

Cyber security expert Richard Clarke once warned about the potential for a telecommunications disaster, saying one could be like an "electronic Pearl Harbor," and analysts with the Congressional Research Services have estimated that a cyber attack could cause more than $200 billion in damages.

Chair of the House Committee on Energy and Commerce, John Dinggell, D- Mich., and five other committee members responded to the report by commending several high-ranking market leaders, but urging them to complete formal plans for business continuity during pandemics. They sent the letter to GAO Comptroller General David M. Walker, Securities Exchange Commission Chairman Christopher Cox, Federal Reserve Board of Governors Chairman Ben Bernanke, and Currency Comptroller John C. Dugan.

"Keeping America's economy secure and operable is paramount to maintaining normalcy in the face of disaster," Dingell said in a prepared statement. "It is an enormous relief that financial institutions are taking steps to prevent financial market failures -- and the widespread confusion that would result -- in the event of a terrorist attack or other unanticipated calamity. We look forward to even more progress by financial organizations in this area."

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
The State of Cloud Computing - Fall 2020
The State of Cloud Computing - Fall 2020
Download this report to compare how cloud usage and spending patterns have changed in 2020, and how respondents think they'll evolve over the next two years.
Top 10 Data and Analytics Trends for 2021
Jessica Davis, Senior Editor, Enterprise Apps,  11/13/2020
Where Cloud Spending Might Grow in 2021 and Post-Pandemic
Joao-Pierre S. Ruth, Senior Writer,  11/19/2020
The Ever-Expanding List of C-Level Technology Positions
Cynthia Harvey, Freelance Journalist, InformationWeek,  11/10/2020
Register for InformationWeek Newsletters
Current Issue
Why Chatbots Are So Popular Right Now
In this IT Trend Report, you will learn more about why chatbots are gaining traction within businesses, particularly while a pandemic is impacting the world.
White Papers
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Sponsored Video
Flash Poll