City firms test terror attack effects.
More than 60 key companies, including investment banks and traders, volunteered for a study to measure how the financial sector would be affected by a major disruption such as a bombing or natural disaster.
While the research suggested most had highly resilient IT systems that could recover critical functions quickly, continuity plans were often too inward-looking and planning did not involve the third parties they rely on, such as BT.
Hector Sants, managing director of the FSA's wholesale firms division, said, 'Several participants have described this exercise as very helpful in terms of improving business continuity teams' understanding of their firms' critical business functions.
'This is a welcome development but highlights that firms need to do more to ensure that business continuity staff are sufficiently aware of the functions they are supporting.'
The internet-based survey, launched in July 2004, focused on key financial sector companies such as those involved in wholesale payments and settlements.
According to the responses the bulk of critical financial infrastructure could be recovered within two hours. However a few firms were not able to recover quickly and these companies would be given help to get systems in place.
The 60 organisations together reported having almost 400 buildings where critical parts of business were carried out - with more than 75% of them within a 5km radius of the heart of the City.
Over a third of the organisations said they did not think their operations would be affected by an attack on London as they had outlying offices that work could be switched to, meaning an attack on the City would not have much impact on them.
The FSA, which worked with the Bank of England and the Treasury on the project, said it was satisfied there was no need to enforce rules on managing business continuity, but said it would continue to monitor the situation closely.
Mr Sants said: 'It is encouraging that the project has established that the core parts of the financial system appear to have highly resilient IT systems that allow them to recover critical functions with impressive speed.
'This stands the sector as a whole in good stead and confirms to us that we do not, at this stage, need to write detailed rules telling firms what business continuity arrangements they should adopt.'