City warned not to be complacent over terrorism

The City was warned yesterday that further terrorist attacks could disrupt
the financial services industry.

In a speech to bankers at Mansion House in London yesterday, Sir Callum
McCarthy, chairman of the Financial Services Authority, said that while the City
had ‘stood up well’ to the events of July 7, it should not be ‘lulled into any

‘July 7 – for all the heartbreak of more than 50 people being murdered and
still more maimed – was not an extreme or even a very taxing test of financial
stability,’ he said.

‘It was neither aimed at, nor did it have a major impact on, the financial
services sector. We cannot count on any future attack being of this nature. It
is therefore important that we learn lessons from July 7, and apply those
lessons to circumstances which can easily be envisaged and which would
constitute a much more severe test.’

The FSA has scheduled a test for November 28 with the Bank of England and the
Treasury to play out scenarios to test how the City will react to any disruption
to the financial system. It is expected to involve ‘civil contingency aspects’
and an ‘international dimension’.

Companies around the City participate, to help test all aspects of the
financial system, including the computer networks that move money around the
financial world. The last test was held a little under a year ago.

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