BONY Lays Out Disaster Plan

November 11, 2002 ( - The Bank of New York (BONY) has unveiled a series of contingency plans designed to deal with disasters "even larger than the World Trade Center."

That’s reassuring news for the financial services industry, since BONY’s processing capabilities were particularly hard hit by the 09/11 terrorist attacks.   In the weeks that followed, BONY executives contended that much of the disruption was due to damaged telecommunications lines, but also pointed to problems with communications systems at BONY’s vendors that may have hindered the bank’s recovery (see  BONY Wants Customers, Vendors To Enhance Back-Up Systems ).   Still, the financial services giant was still struggling to reconcile trades that clients executed in the weeks following the attacks.

“Three” Stroke

Speaking at a Bond Market Association conference on operational issues, Art Certosimo, a BONY SVP, said the bank was expanding its core operations to three different locations in an effort to learn from the serious disruptions it sustained after the September 11 attacks, according to Dow Jones.   BONY’s plans include setting up operations in New Jersey and Florida to complement its Wall Street headquarters, and each site would be able to back up any of the others and step in during a catastrophe.

Under the new contingency plans, BONY hopefully would be able to restore operations within a few hours of a disaster. Backup sites would ideally be able to step in for as long as six or seven months, rather than the several weeks assumed in previous plans, according to the report.

Other Ideas

The threefold location is a central part of the new strategy, but other proposals under evaluation include:

  • a four-day work week, so that some employees are always off-duty on business days but could be moved to other locations if needed, and
  • extended capacity for employees to work from home

Echoing concerns previously articulated by BONY, Certosimo said that the securities industry needs to put pressure on telecommunications companies to make sure their networks keep pace with Wall Street’s improvements, according to Dow Jones.   “We’re pretty vulnerable there,” Certosimo said, according to the report.

See also  Financial Firms Implement Contingency Plans