By Patrick Thibodeau
August 28, 2007
What may be the largest pandemic planning exercise ever conducted in the
U.S. is set to begin next month. The dry run will force financial
services firms to operate with shrinking numbers of employees -- on
paper, at least.
More than 1,800 organizations have signed up to participate in the
three-week simulation, which is being sponsored by the U.S. Department
of the Treasury and the Securities Industry and Financial Markets
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 how their businesses would be affected if a
bird flu outbreak or other pandemic resulted in major reductions in the
number of available employees.
Jim Binder, a spokesman for The Operations Clearing Corp., said the
Chicago-based 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 Sept. 24, Binder said.
But, he added, the program 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 companies won't be able to pick and choose
the level of workforce reductions they get hit by. Binder said some
effort will be made to randomize the process, possibly by forcing
companies to function without employees whose last names begin with
The test is based on a similar exercise conducted last fall in the U.K.
by the Financial Services Authority (FSA), an independent body that
regulates the financial services industry there. The U.K. 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 (download PDF ), the FSA said the exercise showed that
some banks would be forced to close branches and reduce banking
services, including ATMs. According to the FSA, the test also raised
questions about whether the U.K.'s telecommunications infrastructure
would be able to support large-scale teleworking for a prolonged period
as staff shortages eroded the maintenance capabilities of service
Telecommunications vendors will participate in the U.S. 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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