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Preparing for catastrophe: Bunker mentality
(The Economist)Financial firms in Britain are armoured against disaster. Well, mostly
BENEATH an innocuous green hillside in southern England, under 2.5 metres (eight feet) of steel-reinforced concrete, banks of hard drives buzz and hum. Operators, their eyes glued to computer screens, scan attentively for any sign of attack. Some miles away, tucked behind chain-link fences guarded by attack dogs and protected by airlocks, napalm-proof vents and steel blast doors, network servers collate and store encrypted data. You could be forgiven for thinking the cold war had never ended.
Welcome instead to the booming business of computer network security and disaster recovery. Across the country, companies such as Symantec, a producer of anti-virus software, and the Bunker, which safeguards critical data, are taking over nuclear shelters built by the Ministry of Defence.
It may all seem a little paranoid, but not to the regulators of London's financial industry. A study published this week by the Financial Services Authority, the Bank of England and the Treasury suggests that Britain's financial sector is well placed to cope with terrorist attacks, natural disasters and other big disruptions. The report complements a simulated attack carried out two weeks ago to test the responses of both emergency services and financial institutions. The idea this time was to examine what plans firms have to move their operations to back-up sites and to resume critical functions such as settling and clearing trades.
On the whole, the report's conclusions are reassuring. The bulk of Britain's core financial infrastructure can be recovered within two hours of a disaster. Within four hours it can be operating at between 60% and 80% of normal capacity. Give firms a day and almost all services, including trading and retail payments, can be back to normal.
But some of its findings are decidedly worrying. Although most firms have invested in redundant computer systems, only half have plans to cope with casualties among their staff and only half of these have tested such plans. Almost half of the critical sites identified in the study are located within ten kilometres (six miles) of the Bank of England. These include both primary computer sites and their back-ups and almost three-quarters of them are within five kilometres of the Bank. That makes them all vulnerable to a single catastrophic event.
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