Financial services industry well prepared for business as usual

This was the theme of a report today from Michael Foot, Managing Director of Financial Supervision at the Financial Services Authority, to the Action 2000 National Infrastructure Forum.

Michael Foot said:

"98% of High and Medium Impact groups are rated Blue (no identified risk of material disruption) and only 7 firms (all in the medium category) are Amber (agreed containment plan to rectify any shortcomings). And the picture across the whole financial infrastructure is equally encouraging. The exchanges and clearing houses are in good shape and the national payments systems have been fully tested."

Michael Foot said the FSA was now concentrating on four key priorities.

"We are taking urgent and intensive supervisory action on a case-by-case basis with the few firms behind in their preparations. We are confident that the remaining problems are manageable and will be resolved in good time. However if necessary, we will take formal intervention action with any firm if we judge this is needed to protect the interests of stakeholders - depositors, policy-holders and investors.

"Business continuity planning. This is a vital component of firms Year 2000 readiness programme and we have asked firms to send us by 12 November a Completion Statement confirming that their contingency plans are in place and have been tested.

"Consumer and market confidence. The FSA will continue to work closely with the Bank of England and the industry to inform the public and the markets of all that has been and is being done to achieve business as usual and to maintain the high level of confidence that we have seen so far.

"Millennium Event Office. The FSA is finalising plans for its millennium operating regime which will operate through the Date Change. Our event office will have two main jobs, monitoring the financial sectors status and acting as a focal point for dealing with any problems that arise. We are not anticipating major disruption. But it is common sense to be geared up to deal effectively with any problems that do come up."

Notes for editors

There are about 150 financial groups in the High Impact category and about 250 in the Medium Impact category.

According to todays assessment, based on the Action 2000 Traffic Light system, of High and Medium Impact firms:

98% are rated as Blue "The assessment has not identified any risks of material disruption to the infrastructure process"

2% as Amber "The assessment indicates that there is some risk of material disruption to infrastructure processes, but that there is an agreed containment plan to rectify shortcomings"

0% Reds - "The assessment indicates that there is a severe risk of material disruption to infrastructure processes and that timely rectification may not be possible"

The trend since March is shown in the following table: