Financial institutions around the world buckle up for coronavirus outbreak
03/08/2020 / By Ralph Flores
Major banks in the U.S. have started rolling out measures to deal with the impending coronavirus (COVID-19) epidemic, banking sources with knowledge of the matter told AFP.
JPMorgan Chase, which employs over 250,000 employees worldwide, told its U.S. sales and trading staff that they will be split between offices starting next week. In a memo released on Thursday, executives of the bank revealed that the decision was a “precautionary measure” designed to minimize the number of infections and ensure operations in the event of an outbreak and will be tested in the bank’s London and New York offices.
“Dividing our workforce into different locations improves our ability to serve clients continuously while reducing the health risks associated with physical contact should a case arise,” stated the memo.
Citigroup, which houses its global headquarters in downtown Manhattan, will start sending its traders and salespeople to a backup facility in Rutherford, New Jersey on Monday. The bank has also stated that its London office will implement a split. Similarly, Morgan Stanley and Bank of America will relocate some of their traders outside of New York City starting next week, according to people with knowledge of the situation. The former’s move comes on the heels of memo released last week that bars all nonessential travel outside the United States.
Goldman Sachs, which recently canceled its annual partners meeting last month, has also sent its traders to secondary offices in Greenwich, Connecticut, and Jersey City.
“We have recovery sites and we continually test them,” explained a Goldman Sachs spokeswoman. “As you can imagine, we are enhancing our testing in view of the coronavirus.”
Elsewhere, banks and financial institutions are considering similar options.
HSBC has advised some employees from its London headquarters to work at home after a staff member tested positive for coronavirus. On Thursday morning, the bank cleared out the 10th floor of its Canary Wharf office – where the employee was assigned – for deep cleaning. While the rest of its headquarters remains in operation, the bank sent out a statement calling for employees who are feeling unwell to stay at home.
“Our first priority and concern is the health of our employees and customers – and we are encouraging our colleagues to monitor their health carefully and stay at home or call a doctor if they feel unwell,” the statement read.
The Financial Conduct Authority, Britain’s chief regulator, stated that it is working closely with firms about their operations amid the impending outbreak. In particular, traders are faced with a significant challenge: Regulatory reasons bar them from working at home, so firms have to prepare back-up facilities.
“We expect all firms to have contingency plans in place to deal with major events so that they are able to continue operating effectively,” stated the regulator. (Related: World Bank commits $12 billion in aid for countries hit by coronavirus, but experts are bracing for a global recession.)
Contingency also has its challenges
Aside from regulatory oversight, financial institutions are also faced with other challenges that could hamper with operations, according to experts. Many companies have added computer programs that will allow financial traders to access systems, and many recovery sites are extensively tested to ensure smooth operations despite the change in venue. Traders and sales force employees, for instance, should be able to provide the same quality of service even if they are in secondary offices, as well as comply with federal regulations for oversight and recording.
According to a report in the Financial Times, financial firms in the U.S. have already asked regulators to relax their rules, similar to what happened when Hurricane Sandy slammed the city in 2012.
Sources include:
Tagged Under: buble, Collapse, coronavirus, covid-19, economic collapse, economics, financial collapse, financial crisis, financial regulation, Financial Risk, global economy, market crash, outbreak, pandemic, recession, risk, SHTF, stock market, World Bank
RECENT NEWS & ARTICLES
