City Of London To Have Bird Flu Drill

LONDON (Reuters) - The City of London financial services sector will next month test out how it would cope with a bird flu pandemic in an exercise run by finance industry regulators.

The Bank of England, the Financial Services Authority and the Treasury will organise the bird flu simulation event, which will run from October 13 to November 24.

More than 60 organisations from the financial services industry have been asked to take part.

These three bodies cooperate on business continuity planning for incidents that could cause major disruptions to the City of London financial services industry, one of the world's biggest financial centres and home to some of the world's biggest banks.

Last November, the Bank of England, the Treasury and the FSA -- known as the Tripartite Authorities -- carried out the world's biggest ever business endurance exercise to test the financial sector's ability to deal effectively with a major operational disruption.

This involved about 80 firms, including banks, brokerages and insurers, as well as the financial authorities and the police.

"The overall objective for the authorities is to improve their own and the sector's preparedness by providing an opportunity to review, test and update plans for managing a pandemic threat," the three authorities said on their website -- UK Financial Sector Continuity.

Major banks in the City of London have been gearing up to cope with a potential bird flu epidemic for months now.

Last year, for example, Citigroup, the world's biggest bank, set up an avian flu task force, combining business continuity, health services and security services.

During next month's exercise banks and financial services firms will receive regular updates on the severity of the pandemic, its effect on them and on the wider economy.

Banks will review if contingency plans they have made can actually cope in the face of rampant bird flu which will mean reduced staffing levels, disruption to transport, power and telecoms.

The Bank of England, the Treasury and the FSA's business continuity systems were put into action last year during the suicide bomb attacks on London's transport system in July.

The three activated a secret Internet chatroom, which was set up in the wake of the September 11 bombings of the World Trade Centre in New York. This aims to keep lines of communication open between banks and the authorities during a crisis.

In July this year, the Bank of England also ran a seminar to examine how the $2 trillion (1.06 trillion pounds) a day foreign exchange market would cope with a sustained outage of the global currency payments system due to terror attacks or other disruptions.

World Bank warns of economic fallout if bird flu mutates

Deutsche Presse Agentur
Published: Tuesday September 12, 2006

Singapore- The World Bank (WB) warned on Tuesday of a "sharp decline" in economic activity if the current strain of bird flu mutates into a strain transmittable between humans. "The extent of the decline and the prospects for a rapid recovery would depend on the characteristics of the new virus, as well as on the degree of preparedness in both the public and private sectors," the institution said in its Global Financial Stability Report.

The report was released ahead of the week-long International Monetary Fund and World Bank's annual meeting in Singapore.

A pandemic would pose important risks for the global financial system, it said in elaborating on downside risks to be considered while the global financial markets remain strong.

"Some reduction in risk appetite is highly likely" in a pandemic, "leading to a greater demand for liquidity and for low-risk assets."

While the "flight to quality" ought to be temporary, asset price declines could put the balance sheets of some financial institutions under stress," the report said.

It addressed the possibility of a "period in which net capital flows to emerging markets decline, perhaps substantially for countries with relatively week fundamentals."

Operational risks could arise from high absenteeism disrupting critical functions and services of the financial system, including payments, clearing and settlement, and trading.

"Preparation in the form of business continuity plans can go a long way to minimize the potential for such costly disruptions," the World Bank said.

Indonesia and Vietnam have been the hardest hit by the disease since 2003.

The IMF is encouraging countries to prepare for a possible pandemic and has been organizing regional seminars that bring together central banks and supervisory authorities, health experts, and business continuity planners.

Other risks to the current strong performance of the global economy and international financial markets include an intensification of inflation pressures, increases in oil prices; and a more rapid cooling-off in the US housing market, leading to a pronounced slowdown of the US economy, the report said.

Indonesian Bird Flu Case May Have Spread Among People

By John Lauerman

Sept. 14 (Bloomberg) -- A 27-year-old Indonesian man confirmed to be infected with bird flu may have caught it after spending six days caring for a sister who was hospitalized with the disease, the World Health Organization said.

The infection brings the country's total cases of the disease to 65 people, including 49 deaths, the United Nations health agency said on its Web site. The man, from Solok in the province of West Sumatra, developed mild symptoms and recovered in a few days.

An investigation ``determined that he had exposure to his sister during her hospital stay, and that human-to-human transmission could not be ruled out as the source of his infection,'' the agency said in a statement today. He reported no contact with dead or diseased poultry before falling ill.

The case represents another cluster of possible human-to- human transmission and raises questions about the strain of H5N1 spreading in Indonesia, said Ira Longini, a University of Washington epidemiologist who advises the U.S. government on flu issues. Health officials are concerned that the H5N1 bird flu, which has killed more than half of those infected, may mutate into a form that spreads easily among people.

``It's still an avian strain, but it could be more adapted to human populations,'' Longini said today in a telephone interview. ``These human clusters of cases in Indonesia with apparent human-to-human transmission are great cause for concern.''

Previous Case

Disease trackers investigated another outbreak of bird flu among Sumatran family members in May, in which a woman might have passed the infection along to six relatives. One of those patients, a 10-year-old boy, may have then infected his father.

Deadly influenzas spread around the world in 1918, when the disease killed as many as 50 million people, and again in 1957 and 1968.

The H5N1 flu has infected 246 people in 10 countries since late 2003, killing 144 of those patients, the WHO said today. More than 200 million birds worldwide have died from the disease or been killed to prevent its spread.

Health officials in the U.S. and other nations have built stockpiles of antivirals such as Roche Holding AG's Tamiflu and GlaxoSmithKline Plc's Relenza. Roche said today that its U.S. supply chain for Tamiflu is fully operational and able to make treatments for 80 million influenza cases.

To contact the reporter on this story: John Lauerman in Boston at jlauerman@bloomberg.net .

Last Updated: September 14, 2006 12:44 EDT

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