Bank of England led task force publishes major operational disruption report

A task force led by the Bank of England, which was established to consider the UK’s preparedness for a major operational disruption in the financial system, has concluded that no new legislation is needed to deal with the aftermath of terrorist incidents or large-scale disasters.

The task force, chaired by Sir Andrew Large, deputy governor of the Bank of England, found that existing contractual mechanisms and legal provisions available to market participants and infrastructures were generally sufficient to allow the financial sector to manage risks appropriately. It concluded that such mechanisms, together with co-ordinated contingency planning across the public and private sectors were best suited to the particularly international and interconnected nature of the UK's financial markets.

The task force made a number of recommendations for further improvements to preparations in other areas such as private contracts and the rules of market infrastructures, such as clearing-houses and stock exchanges, while also recommending further contingency planning work by the financial authorities (the Treasury, Bank of England and Financial Services Authority).

Sir Andrew Large commented: "Considerable work has already been undertaken to address the potential impact of major operational disruption. The focus of the Task Force has been on whether there is a need for new statutory powers. Our conclusion that no such powers are needed is not a signal that there is room for complacency. There are still areas where more needs to be done. We have therefore put forward a number of recommendations designed to improve the resilience of the UK's financial markets. It is important that they are implemented.

“I should like to thank all those that have devoted considerable time to the work of the Task Force and its Working Groups. This is an important subject and I hope the financial community can continue to work together in taking forward the report's recommendations."

HM Treasury’s financial secretary, Ruth Kelly stated: "I support the task force conclusion that no new legislation is needed and accept those recommendations which apply to the financial authorities and support those which are for others to implement.”

Read the full report here

•Date: 4th December 2003 •Region: UK •Type: Article •Topic: Terrorism
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