In what may be the largest pandemic planning exercise conducted in the US, financial services firms will be forced to operate with reduced employee numbers next month - on paper.
More than 1,800 organisations have signed up to participate in the three-week simulation, which will measure the impact of a pandemic flu on the financial sector. The simulation is being sponsored by the US Department of the Treasury and the Securities Industry and Financial Markets Association.
The exercise will also cover telecommunications issues. But it won't cause any service disruptions, such as long lines at ATMs or problems reaching online banking sites. Instead, participants will gather in conference rooms and assess the impact that major reductions in the number of available employees would have on their businesses in the event of a bird flu outbreak or other pandemic.
Jim Binder, a spokesman for The Operations Clearing, said the provider of derivatives clearing and settlement services will have 30 to 40 workers involved in the planning exercise. The full details of how the simulation will unfold are being kept secret until it starts 24 September, Binder said.
But, he added, the programme will follow a compressed time frame that simulates the impact of a 12-week pandemic wave. Participants will be given information on how many absentee employees they can expect. Companies won't know exactly how hard they will be hit with sick-calls from employees until this data is made available, Binder said.
In addition, participating firms will not be able to pick and choose the level of workforce reductions they get hit by. Binder said some effort will be made to randomise the process, possibly by forcing companies to function without employees whose last names begin with certain letters.
The test is based on a similar exercise conducted last autumn in the UK by the Financial Services Authority (FSA). The UK simulation used employee absenteeism levels that began at 15% at the onset of the pandemic and then reached as high as 60% in some business units.
In a report, the FSA said the exercise showed that some banks would be forced to close branches and reduce banking services, including use of their ATMs.
According to the FSA, the test also raised questions about whether the UK's telecommunications infrastructure would be able to support large-scale teleworking for a prolonged period as staff shortages eroded the maintenance capabilities of service providers.
Telecommunications vendors will participate in the US exercise, Binder said. The simulation will be jointly conducted by the Financial Banking Information Infrastructure Committee, which is chartered by the White House to improve coordination among financial regulators, and the Financial Services Sector Coordinating Council, a Chicago-based association of major financial services firms and trade groups.
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