The Bank of England, alongside UK Finance and various other financial authorities including HM Treasury and the Financial Conduct Authority, recently spearheaded a critical simulation known as SIMEX 24.
According to Finextra, this exercise was designed to test the resilience of the UK’s financial sector against a major infrastructure failure necessitating a comprehensive shutdown and reboot of operations.
Developed by the Cross Market Operational Resilience Group (CMORG), established in 2015 by the Bank of England, SIMEX is part of an ongoing series of drills stemming from the UK Government’s National Risk Register. These exercises are crucial in ensuring that the financial sector can robustly respond to potential disruptions, thereby reinforcing the stability of the financial system and boosting public confidence.
During this latest exercise, industry-wide strategies were tested to safeguard and sustain essential economic services. Sam Woods, Deputy Governor of Prudential Regulation and CEO of the Prudential Regulation Authority, emphasized the importance of preparing for diverse risks. “It is vital to prepare our response to a wide range of risks, including for the most challenging scenarios. SIMEX and the sector exercising programme provide unique opportunities for the whole banking sector, across industry and the authorities, to practise how to protect and defend services on which the economy depends,” he stated.
Adding to the importance of these exercises, David Postings, Chief Executive of UK Finance, highlighted the ongoing focus on resilience within the financial services industry. “A resilient financial sector is crucial in a modern economy and a continual area of focus for the financial services industry. The sector-wide exercise this week helps ensure we can respond effectively to any potential incident and protect the UK’s financial system and its customers,” Postings noted.
CMORG’s efforts also extend to the Sector Response Framework (SRF), which outlines how the financial sector should collectively respond to systemic incidents. This framework was a key focus of the SIMEX 24, ensuring that the UK financial services industry is equipped to handle severe disruptions effectively and in a coordinated manner.
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