Treasury green paper to protect banking system from terrorists and viruses. The government is considering legislation to protect the banking system in the event of a major terrorist attack or computer virus outbreak. A green paper, The financial system and major operational disruption, published this week by the Treasury, warns that a major catastrophe could threaten the whole financial infrastructure of the UK. The institutions most at threat include the CHAPS and BACS payment and settlement systems, and the proposals reflect how critical banking IT systems have become. “A payment system is the most basic and fundamental kind of financial infrastructure – without the transfer of money operating effectively few parts of the financial system will work well,” said the green paper. Any legislation would allow for a suspension of financial institutions’ legal obligations to settle contracts until computer networks and physical infrastructure had been restored. In the event of a terrorist attack, institutions would be able to “focus on restoration of operational networks in preparation for resumption of normal business, with less preoccupation with short-term financial pressures,” the paper said. Full Story
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