Bank exercise plans for disaster.

Byline: Joe Mosley The Register-Guard

What if bird flu mutated into a disease that could be passed readily from human to human? What if it was brought to the United States by an infected traveler and quickly spread to pandemic proportions?

And what if financial life had to go on - transactions essential and mundane needed to be conducted - despite the dire nationwide circumstance?

Sometime after the next three weeks, you can ask the U.S. Treasury Department.

A total of 2,725 banks and other financial institutions across the country - including several in the Eugene-Springfield area - have volunteered to take part in a federal exercise to highlight the risks a pandemic would present and the readiness of the financial services sector to weather such an outbreak. The drill began Monday and will run through Oct. 12.

"We feel it's a good opportunity to participate with other financial institutions in a federally-sponsored exercise," said Tom Unger, spokesman for Wells Fargo Bank in Oregon. "Our customers can be assured that Wells Fargo has an extensive business continuity plan in place to keep business running as usual."

In the scenario that was distributed to participating financial institutions, an outbreak of bird flu has begun overseas and spread to the United States. The exercise covers 12 weeks of the resulting pandemic, from the initial cases to the the start of a recovery period, with each week of the study encompassing multiple weeks of the fictitious plague.

For the first week's phase of the exercise - which represents two weeks of the pandemic wave - banks have been asked to envision 25 percent of their work force being unable to come to work. The absenteeism is because of illness, fear of being infected or parents staying home to care for children whose schools have closed.

The absentee rate will bump up to 49 percent the second week's phase of the study, which represents weeks three through six of the simulated outbreak.

"This testing is great, because it lets us know what holes we have in our plan currently," said Triva Hazelton, an administrative assistant and manager of pandemic planning for Eugene-based Pacific Continental Bank.

Hazelton said her bank's response to a sudden and dramatic reduction in work force, whether because of a flu outbreak or natural disaster, is to avoid relying on individuals to perform essential tasks. "It's cross-training," she said. "Making sure you have those backup employees, and making sure other employees can do your job if you're not there."

The solution also could involve some employees working from home, as well as other measures to maintain the bank's ability to serve both its customers and the nation's financial network.

"That's a 'We won't know it until it happens' type of thing," Hazelton said. "But we can plan the best we can."

As each week's scenario update is received, Hazelton said she'll be completing its list of multiple-choice questions with the help of Pacific Continental's department heads.

At Umpqua Bank, regional Vice President Terry Gent said his institution is not participating in the study but has laid out a detailed contingency plan for operating in the event of a disaster.

"Bank-wide, we have what we call our business resumption plan, and we test it annually," Gent said. "It includes everything from who gets ahold of whom, and if you're in a different location how do you tap in to make sure this thing or that is working."

The federal exercise is sponsored by the Treasury Department and overseen by a pair of obscure federal organizations - the Financial and Banking Information Infrastructure Committee and the Financial Services Sector Coordinating Council.

The bird flu scenario anticipates challenges ranging from absenteeism to dealing with diminished Internet bandwidths as the number of people attempting to telecommute begins to overwhelm the system. Other issues include refilling ATM machines with cash as armored car companies deal with their own problems of absenteeism and fuel shortages.

Financial institutions and supporting companies were invited to participate in the study anonymously and without charge. The study unexpectedly filled all available slots.

An "after-action report" is expected to be completed by the Treasury Department and shared with participating institutions sometime after the exercise is completed.