In the UK, the Tripartite Authorities, which consists of the Financial Services Authority, the Bank of England and HM Treasury, have instituted an annual simulation, called the market-wide exercise, to test responses to sector-wide disruption of the financial services industry and highlight issues of interdependency that could not be examined using stand-alone simulations.
In the past few years, the market-wide exercise has grown from a round-table discussion involving approximately 130 people in 2003, to a fullscale, realistic simulation in 2005, which brought together 7,000 participants from 70 organisations, including the major banks, the City of London Police, the Corporation of London and seven overseas regulators.
The November 2005 market-wide exercise simulated a series of terrorist incidents in London and other cities that affected people, buildings and infrastructure. Information was relayed as realistically as possible using news broadcasts and websites and participants were encouraged to contact the civil contingencies agencies and authorities that were also taking part in the exercise. Coming just a few months after the July 7 bombings in London, the market-wide exercise was also an opportunity for participants to test the new measures they had put in place in response to the attacks.
"The underlying purpose of the market-wide exercise is to make the financial sector as resilient as possible against any kind of operational disruption and to promote good practice," explains Richard Maddison, deputy head of the business continuity management team at the Financial Services Authority. "It is an opportunity for participants to test their own plans, but because we can get all these people together at the same time, it is also a way of testing in a realistic fashion the durability of the sector as a whole."
In 2006, the market-wide exercise will focus on the threat from a pandemic outbreak for the first time. "It's a threat that hasn't been thought about so much over the years, so we're particularly interested in what the cumulative effect is on the sector and how we as regulators need to deal with that," says Mr Maddison.
With a pandemic outbreak likely to spread in waves over a period of months, the use of real-time, realistic simulations played out over a short timeframe, which has been the model used in the past, is less appropriate.
"Because of the nature of the threat, and because we want to get as much out of the exercise as possible, we're going to run it over a six-week period," explains Mr Maddison. "We want people to go away and research properly what the answers might be and then come back to give it their considered opinion. It's a rolling series of discussions against a scenario."
