The Bank of England, in partnership with UK Finance, the financial sector and the other UK financial authorities (HM Treasury and the Financial Conduct Authority), has undertaken its latest UK market wide simulation exercise, SIMEX 24.
The simulation set out to exercise the UK financial sector’s ability to respond to a major infrastructure failure that would require a total shut down and restart of the sector.
SIMEX has been developed and delivered by the Cross Market Operational Resilience Group (CMORG), a strategic partnership between the financial authorities, UK Finance and industry, established by the Bank of England in 2015. It is the latest exercise in a continuous programme that explores the financial sector’s response to some of the most challenging scenarios, including those on the UK Government’s National Risk Register.
The exercise and wider programme to develop financial sector capabilities, supports both the aims of the financial authorities and of firms to ensure collective response tools are in place to respond to disruptive events. This improves the operational resilience of the financial sector and promotes a stable financial system that the public can depend on.
Sam Woods Deputy Governor of Prudential Regulation and CEO of the Prudential Regulation Authority said: “It is vital to prepare our response to a wide range of risks, including for the most challenging scenarios. SIMEX and the sector exercising programme provide unique opportunities for the whole banking sector, across industry and the authorities, to practise how to protect and defend services on which the economy depends.”
David Postings, Chief Executive of UK Finance, said: “A resilient financial sector is crucial in a modern economy and a continual area of focus for the financial services industry. The sector-wide exercise this week helps ensure we can respond effectively to any potential incident and protect the UK’s financial system and its customers.”
CMORG enhances the operational resilience of the UK financial sector through collective action, and is supported by specialist industry groups. It achieves this through the identification of systemic risks, the development of solutions to support sector-wide mitigation strategies and sharing capabilities and knowledge across the sector.
As part of this work, CMORG oversees the approach for sector-wide response to systemic incidents through the Sector Response Framework (SRF). The SRF is a key component exercised through SIMEX to ensure the UK’s financial services industry is ready to respond effectively and in a coordinated manner to severe disruption.