The UK Treasury is calling for public comment on the development of new statutory and private sector initiatives for restoring order in the financial markets after major operational disruption.
Operational disruption includes problems arising from physical causes, such as a terrorist attack or severe adverse weather, or from IT difficulties, such as a computer bug or virus.
The consultation seeks views on improving the way the financial system works in such situations. The Treasury has published a green paper outlining proposals for further strengthening of private sector approaches to these issues and asking whether new statutory powers for the authorities to suspend certain financial system obligations and to direct financial infrastructure, including exchanges, clearing houses and payment systems might be useful in extreme circumstances.
The latter provisions are likely to provoke controversy, giving the UK government the power to take over the running of key financial infrastructures and suspend payment obligations and legal recourse in the event of an "extreme" event, such as a dirty bomb attack on the Square Mile.
Financial secretary, Ruth Kelly, says: "The 11 September attacks on the United States caused terrible loss of life and physical damage. They also showed the problems that physical disruption on such a scale brings for the financial system - as exemplified by the four-day closure of the New York Stock Exchange. Financial services play a vital role in the UK economy. This makes it particularly important to be sure that we have good arrangements in place to maintain the financial system's resilience during major operational disruption."
The consultation period will run to 25 April. If the Government decides that new statutory powers are appropriate, they would be introduced in the proposed Civil Contingencies Bill. There would be a further opportunity for comments to be made before the Bill is introduced in Parliament.