Internet Chatroom Helps Keep City of London OpenBy Jane Merriman, Reuters and Alistair MacDonald
Reuters July 8, 2005
SourceLONDON, July 8 (Reuters)—A secret Internet chatroom run by Britain's financial regulators helped keep London's financial markets open after Thursday's bomb blasts, while financial firms activated security measures in case of further attacks.
The Bank of England, the Treasury and the Financial Services Authority switched on a secure section of their Financial Sector Continuity Web site to talk to major banks in the City of London's financial hub about how they were coping.
A Bank of England spokeswoman said this was the first time the secure site had been used in an actual crisis situation since its creation in the wake of the Sept. 11, 2001 attacks on the World Trade Center in New York.
"In the light of yesterday's events, the tripartite authorities (Treasury, Bank of England and FSA) have activated the contingency part of the Web site," they said on Friday.
The Web site has a secure section in which the authorities can communicate directly with big banks that are key to the stability of the international financial system.
The City of London's financial markets, where currencies, stocks, bonds and commodities worth trillions of dollars are traded daily, kept going despite disruption from Thursday's bombings on a London bus and underground trains, which killed more than 50 people and injured hundreds.
"Contingency planning by banks has increased considerably in last three years, post Sept. 11, and what yesterday shows is that the planning has worked," said David Key, crises management practice leader at Control Risks Group, which advises many banks on crisis and security management.
PLANS IN PLACE
Swiss financial services group UBS, for example, briefly evacuated its building on Liverpool Street, which houses bond and currency desks, but contingency plans ensured trading was not affected.
Japanese bank Nomura did not have to evacuate staff to any of its three disaster recovery sites in London, but a well-rehearsed plan was put into effect, coordinated by an emergency response team, which held meetings every hour.
Nomura security staff were alerted to the bombs by text, pager and e-mail messages sent by London's police service. A complete roll call of staff was taken, and a helpline for family and friends set up. On Friday, the bank was operating with about half its usual staff, with people being told they need not come in if they did not feel comfortable doing so.
The Corporation of London, the body that runs the City, and City of London police also have an Internet communication system that was used on Thursday to pass on advice to banks and other firms in the "Square Mile", the European hub for some of the world's biggest financial services firms.
Banks have long had plans for such attacks and routinely monitor code levels put out by intelligence services and the police. Chairmen of several big banks, for example, plus their security chiefs, had a briefing with intelligence services about four months ago, one bank source familiar with the matter said.
"Banks' internal security teams have got better and more sophisticated as they have invested in best practise," Key said.
"There has also been a move away from the traditional focus on security towards risk management, or understanding the threat and developing resilience," he said.
CONTINGENCY
The City of London is no stranger to bomb attacks.
In 1992 many firms suffered devastation from a huge car bomb planted by the Irish Republican Army outside the Baltic Exchange in the heart of the area. A year later, an IRA truck bomb ripped through buildings around Bishopsgate.
Clarkson, a 150-year-old ship-broking firm, was badly hit in both these IRA attacks, and its offices are now by the river Thames, away from the City's centre.
"We now have very strong security measures, disaster recovery and back up," Steve Deasey, Clarkson's company secretary, said. "We've been through two disasters, so we are geared up for it."
Clarkson has an offsite back-up system operated by a third party. Brokers can also trade from home, and many were doing so on Friday, the company said.
Aviva, Britain's biggest insurance company, also had its head office tower badly damaged by both IRA bombs. The company has disaster-recovery systems, which include evacuating the building or "invacuating" to safe areas in the basement.
"We have a management team drawn from a number of departments who meet and hold regular practices," an Aviva spokeswoman said. "Yesterday we took advice from the City police and closed the exits in the building and staff stayed inside."
Many banks have set up back-up systems outside the City for use in an emergency, and some were activated on Thursday.
Some firms have even looked into facilities offered by an Essex farmer, who owns what was once a nuclear bunker for London. The farmer, Mike Parrish, says banks have looked into using it for computer back-up, storage and as an emergency office in the past and he expects more enquiries going forward.
Individual places in the bunker, which is nearly 100 feet below ground near the Essex village of Kelvedon Hatch, east of London, cost 30,000 pounds ($52,000) each, while banks wanting to use it could be charged "in the millions".
(Additional reporting by Sean Farrell)
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