If the RBS computer failure taught us one thing, it is that no organisation is too big to be brought to its knees in a matter of hours.
The 17 million people whose accounts were affected – me included – were locked out for as long as three weeks (a mere seven days in my case), but credit must be given to the City watchdog for attempting to ensure that nothing like this happens again.
In a strongly worded letter sent out to the chairmen of the nine leading banks, the Financial Services Authority (FSA) has asked for each to reveal who exactly will be culpable, should their organisation fall foul of a similar fate to RBS.
In addition, the new letter – written by Andrew Bailey, head of the FSA’s prudential unit, and Clive Adamson, director of supervision in the conduct unit – orders the banks to detail what exactly they would do in the case of a technological meltdown.
Though it is nice to know that we will be protected in the event of another system meltdown, and that contingency plans are in place, the chairmen’s assurances will only truly be put to the test if such an incident does actually occur.
As Emily Reid, law partner at Hogan Lovells, told the FT: “The FSA’s approach is only to be expected following RBS’s problems. The conundrum for the FSA as regulator and for the banks themselves is that their true level of preparedness can only be truly tested if there is a catastrophic failure.”
As the old adage goes – only time will tell.
Posted by The Secret Businessman