The UK financial services sector took part yesterday in the largest ever market-wide test of its preparedness to respond to a major crisis such as a terrorist attack, natural disaster or widespread infrastructure damage.

The desk-based exercise was organized by the financial stability teams at the HM Treasury, the Bank of England and the Financial Services Authority who would have responsibility for overseeing and co-ordinating the markets response to such an incident. More than 1,000 people, from the three authorities and some 80 organizations across the UK took part, many holding their own internal business continuity exercises to run alongside the main event. The exercise was also attended by representatives from overseas regulators.

The test, which was designed to be as realistic as possible, involved a scenario of widespread disruption in London and other financial centres, and included simulated news broadcasts, interviews and market and currency movements.

KPMG will report early in 2006 on the effectiveness of the sector’s business continuity preparations and the authorities’ contribution. A report on the findings together with any recommendations for improvements will be published.

The scenario was designed by Crisis Solutions Limited, KPMG and the authorities with the assistance of organizations such as the Metropolitan and City of London Police, City of London Corporation, Canary Wharf Management and the London Resilience Team.