About 70 businesses took part in a six-week contingency test that was designed to determine if the financial system would cope in the event of a severe flu outbreak. Although the financial system in the UK would continue to function, the test's results raised concerns about how consumers would get access to cash and how firms could restore operations afterwards.
Warnings of a global flu pandemic causing widespread disruption in many industries determined that such an event could have a devastating impact on the world economy. The impact, in fact, could far exceed $30 billion financial damage that resulted from the 2003 Sudden Acute Respiratory Syndrome (SARS) outbreak.
Many experts believe that stock markets and banks could close in a worst-case flu pandemic scenario -- which would bring global trade to a halt. The recent test simulated the first five months of a pandemic in the UK's financial markets only.
The test assumed that companies -- including banks, stock exchanges, payment and settlement firms -- would lose up to 48 percent of their staff through absenteeism. The results of the test, however, did suggest that the financial system would not be paralyzed and that core services would continue to operate.
Callum McCarthy -- the chairman of the Financial Services Authority (FSA) in the UK -- said that "All who took part have learnt valuable lessons, which both individual participants and the sector as a whole will build on … the work we are doing now, in a benign period, will help the financial services sector prepare for a pandemic or other threats to its stability which we will face in more difficult times."
In addition to the tests that helped simulate conditions that would arise from a flu pandemic, the FSA -- in conjunction with the Bank of England and the Treasury -- has carried out a series of exercises in the past 18 months to see how the banking system would face up to emergencies such as a terror attack.