Member firms’ contingency plans were activated as they moved to their back-up sites, and many of the problems encountered were caused by reliance on technology not people, says Meridien Research.
Awareness of the need for contingency planning was heightened by the 1993 bombing of the World Trade Centre, though most plans have catered for short-term power outages or single building fires, for example. Because electricity supplies and telecom systems are largely organised along state lines, it was relatively easy for firms to relocate across the river to New Jersey, or to neighbouring Connecticut.
Commercial back-up centres coped well, though working conditions are hardly luxurious. Lehman Brothers, however, moved into the mid-town Hilton.
The main reason equities trading was suspended was because non-emergency services personnel were not allowed into the area where the NYSE open outcry trading floor is located. “This begs the question, what happened to their contingency plans,” the report says of the exchange itself.
But when trading resumed on Wall Street on 17 September, just six days after the attack, there was not a single problem in the execution of a trade. This was surprising given the above-average volumes.
In the bond markets, the report warns that greater volumes of individual bond issues going through a single firm creates a high concentration risk.
The report concludes that “the securities markets showed that the United States market is far stronger than the several buildings that fell. The strength of the securities market was not just the opening bell on Monday, but also the participants themselves that stepped in and fixed anomalies.”
A report by IDC on how the telecom networks coped with the New York disaster concludes that the major local, long distance and wireless providers performed “pretty much as expected”. Verizon, the local operator, largely restored service to the New York Stock Exchange by the time trading resumed on the following Monday. The wireless networks quickly deployed “cell sites on wheels” – COWs – to replace equipment that was destroyed or inoperable.
But businesses will likely change how they view the work-at-home option, says the report. “Companies will want to ensure that their employees can stay in touch … Providing email and ensuring that employees can share files from home will aid this.”
– The Dawn of a New Market Reality is available at www.meridien-research.com
IDC Flash: the impact of the September 11th attacks on the telecommunications infrastructure is at www.idc.com.
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