The Bank of England (BoE),in partnership with the Financial Conduct Authority (FCA) and the British Treasury, has completed a two-day simulation exercise with firms, designed to assess the financial sector’s resilience against a ‘major operational disruption’.
The exercise - dubbed SIMEX 22 - was developed by the Cross Market Operational Resilience Group (CMORG),a joint initiative between the financial authorities and financial industry bodies.
SIMEX 22 involved 50 regulated firms as well as core financial authorities, including the BoE, FCA, UK Finance, and the Prudential Regulation Authority (PRA) with the intention of helping both financial firms and their supervisors by identifying weak points in collective response capabilities, and improving the resilience of the financial sector as a whole.
The simulation followed on from the success of SIMEX 2018, which tested ‘a prolonged and broad cyber attack’ and the impact of a protracted operational outage of a Global Systemically Important Bank (GSIB).
Sam Woods, deputy governor of prudential regulation and CEO of the PRA (pictured),said: “It is important to prepare our response to any widespread incident. The financial authorities and industry working together to rehearse our response is a vital part of this.”
The details of SIMEX 22 have not yet been released, but areas of operational resilience that could have been tested include man-made threats such as physical and cyber attacks, IT system outages and third-party supplier failure - a recent focus at the BoE - alongside natural hazards such as fire, flood, severe weather and pandemic.
CMORG will consider the findings over the coming months, and ensure that collective capabilities are developed to mitigate any risks that are identified.