UK groups set for business disaster test

LONDON - The country is preparing to put the financial services sector through its paces today when it carries out the world's biggest business endurance test, checking the industry's response to a major disaster.

"It's a virtual exercise. It is all desk-based play-acting. A series of events will unfold and we will have to deal with them as if they were really happening," said a spokesman for the Financial Services Authority (FSA), one of the organisations helping to run today's test.

"Last year was terrorist bombs, not dissimilar to what happened in July when bombs were going off in different parts of the City. This year it could be a natural disaster or an economic one."

In July, when four bombs tore through London's transport system, the FSA, Bank of England and Treasury implemented one plan, kicking off a secret internet chatroom to help keep financial markets open.

The site had been created in the wake of the September 11, 2001 hijacked plane attacks in the United States.

The disaster simulation will be the largest of its kind, involving around 80 firms, including banks, brokerages and insurers, as well as the financial authorities and the police.

The details of the scenario are being kept under wraps but it is likely to involve accounting for staff, dealing with the media and transmitting information to market participants.

The simulation is intended to prepare for any catastrophic event, including terror attacks, a major flood or an outbreak of a pandemic disease.

It is the second disaster simulation exercise and the first nationwide test.

July's explosions, which killed over 50 and injured hundreds during the morning rush hour, led to banks scrambling to implement disaster plans and left thousands of workers with long treks home.

London's financial markets, where currencies, stocks, bonds and commodities worth trillions of dollars are traded daily, kept going despite disruption from the bombings on a London bus and underground trains.

The City of London is no stranger to bomb attacks.

In 1992 many firms suffered devastation from a huge car bomb planted by the Irish Republican Army outside the Baltic Exchange in the heart of the historic financial district area.

A year later, an IRA bomb ripped through buildings around Bishopsgate, also in the city centre, while in 1996 the IRA were held responsible for exploding a bomb in the Canary Wharf financial district to the east of the City.

- REUTERS