Federal regulatory agencies in the US say that clearing and settlement organisations and other firms that play significant roles in critical financial markets are now considerably more resilient to wide-scale disruptions than before September 11.
The findings are disclosed in a study prepared by The Federal Reserve, the Office of the Comptroller of the Currency and the Securities and Exchange Commission private sector moves to implement more rigourus contingency planning. Download the document now 68.1 kb (Adobe Acrobat Document)
The paper states that core clearing and settlement firms, which present the greatest potential risk to the operation of the financial system, have made significant investments in improving infrastructures.
According to the report, all core clearing and settlement organisations, which are located in Manhattan, now have remote backup data and operations centres. Several organisations also share or periodically shift processing work between primary and remote backup sites.
Meanwhile, relevant banks and broker dealers have either already completed implementation, or should do so this year.
As a result of this effort, and other volunatry initiatives by individual firms to beef up their recovery procedures, the regulatory bodies say they will not expand the current scope of the application of the requirements to additional private sector financial services firms lower down the value chain.
However, the paper does say that firms are reviewing their business continuity arrangements to cope with a possible widespread outbreak of avian flu and are working to find ways to contain the spread of such an influenza, protect employees and maintain continuity of critical operations.
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