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UK finance industry to test `red alert' readiness

Britain's finance industry will be on red alert today for a mock disaster that will test its readiness for a major catastrophe such as a terrorist attack, natural disaster or epidemic.

The exercise will be organized by the Bank of England, finance watchdog the Financial Services Authority (FSA) and the Treasury, in conjunction with London's Metropolitan Police and other emergency services.

It will also involve some 80 banking companies, brokerages, investment and insurance groups across British financial hubs such as London, Leeds and Edinburgh.

The test comes four-and-a-half months after the July 7 suicide bomb attacks on London's Underground train network and a bus, that claimed 56 lives, including those of the bombers.

The disaster scenario for this year's test exercise is being kept secret to make it as realistic as possible. Last year's test, the first of its kind, simulated explosions within the City, London's busy financial district.

"It could be a terrorist attack, or an airplane crash, or a natural disaster like a flood or an epidemic," according to FSA press officer Rob McIvor.

"It is a virtual exercise so we will not see people running through the streets. It's office-based," he said.

The exercise is aimed at checking the effectiveness of communication channels and decision-making processes in emergency circumstances -- with the goal being to prevent a shutdown of Britain's financial markets.

Following the Sept. 11 attacks in the US that killed some 3,000 people, a secure Internet chat room was created for global finance institutions to interact and coordinate responses to similar disasters.

"There is a secure discussion board where people in the finance sector can exchange information about what is happening," McIvor said.

That would also act to reassure global markets in the case of another such catastrophe, he said.

"The `chat room' can be accessed only by the authorities and business continuity teams in financial firms," he said.
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