In the wake of the deadly bombings in London on July 7, the remarkable recovery of financial markets there–credited in part to a secret Internet chat room operated by some of Britain's top financial authorities–raised a key question: what systems are in place in Canada to keep the financial world ticking in the event of a major disaster?
Canadian Business decided to do some detective work of its own and find out. But first, a little more about this clandestine site.
Vanessa Crowe, a press officer for the Bank of England, confirms the existence of a secure, members-only website that allowed London's biggest banks, financial institutions, exchanges and clearing houses to communicate with one another during the recent terrorist attacks. By allowing key financial players to post and share important updates in an online community, information travels “in both directions in an efficient way,” Crowe says. “It certainly proved to be effective on the day [of the bombings].” In fact, while the FTSE 100 blue-chip stock index plummeted 4.1% in early trading, it closed the day at 5,158.3 points, down just 1.4%.
Do we have a similar virtual communications system here at home? Most representatives from the major financial organizations we spoke with are tight-lipped about their business continuity plans. At the Bank of Canada, measures include infusing cash into the markets to ensure liquidity. And in the extraordinary circumstances of Sept. 11, 2001, interest rate cuts were implemented to prevent a slump.
Meanwhile, Connie Craddock, vice-president of public affairs at the Investment Dealers Association of Canada, confirms that her organization operates a members-only online “crisis communications centre” that can be activated during a disaster.
Finally, Steve Kee, the TSX Group's director of media and marketing, says North America's third-largest exchange has an undisclosed “secondary trading location” that can be up and running almost “immediately” to help avoid the kind of market meltdown that occurred in New York on 9/11. He admits he's never heard of the Brits' now-not-so-secret Internet site, but says he finds the concept “intriguing.”