Disaster Planning Has Only Just Begun despite Continued Dangers
Byline: Phillipa Leighton-Jones
A year ago, business contingency planning (BCP) was a dull, peripheral and largely unknown part of an investment bank's business support. With the exception of the World Trade Center bomb in 1993, the worst BCP teams had prepared for were telecoms or power outages, or a small fire on one of their floors.One year on from September 11, BCP has taken centre stage and shot to the top of many banks' priority lists. In a rare example of solidarity, Wall Street firms have been working together to develop a post-9/11 strategy.
But even after 9/11, many are concerned that Wall Street is not moving fast enough. Last week, four financial services regulatory agencies, including the US Federal Reserve, headed by Alan Greenspan, issued a white paper on sound practices to strengthen the resilience of the US financial system.
The Securities Industry Association, which has spent the past year working with 60 securities firms on codes of best practice for disaster planning, issued its own guidelines for BCP.
It has taken a long time, but both sets of guidelines help to map out a path that will help US firms align their own disaster planning efforts with new regulatory requirements.
Some of the biggest US institutions already have business continuity plans well under way. The New York Stock Exchange, for example, has built a second Manhattan trading floor and is planning a further facility elsewhere in the state of New York.
Other exchanges, such as the Philadelphia Stock Exchange and the American Stock Exchange, have talked about the possibility of sharing disaster recovery centres, which for smaller exchanges are prohibitively expensive. However, most have decided to go it alone, using "mirroring" techniques to run duplicate copies of their data centres.
Most big investment banks have decided to create dedicated back-up facilities situated away from their headquarters. Morgan Stanley is creating a second back-up trading floor and is focusing on moving some facilities outside the metropolis of New York. Goldman Sachs, under chairman Hank Paulson, will move some staff to a new facility in New Jersey over the next two years. Bernard L Madoff Securities has doubled its capacity in London.
Till Guldimann, deputy chairman and chief strategist of Sungard, which numbers 47 of the world's largest 50 financial institutions as clients, says the work is far from over, even for those companies that have dedicated the most resources to back-up facilities in the past year. "Financial …
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Publication information: Article title: Disaster Planning Has Only Just Begun despite Continued Dangers. Contributors: Not available. Newspaper title: Financial News. Publication date: September 8, 2002. Page number: Not available. © Not available. COPYRIGHT 2002 Gale Group.
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