Waking Shark to test London's cyber-preparedness

8 November 2013
By Tereza Pultarova
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The Bank of England was said to be the main coordinator of next week's massive fake cyber-attack on London's financial sector

The Bank of England was said to be the main coordinator of next week's massive fake cyber-attack on London's financial sector

Financial companies in the UK’s capital will be put through a war game scenario next week to test how well they can handle an extensive cyber-attack, Reuters has reported.  

In one of the largest exercises of its kind in the world, firms will be bombarded with a series of announcements and scenarios, imitating a major attack on computer systems. Dubbed the Waking Shark II, the test will try to assess how much a major cyber-attack  would disrupt stock exchanges and unfold on social media.

Co-ordinated from a single room housing regulators, government officials and staff from banks and other financial firms, the exercises will resemble a similar operation conducted two years ago. As well as in the previous case, the Bank of England, the Treasury and Financial Conduct Authority will be the main coordinators of the event.

Simulations are likely to include how banks ensure the availability of cash from ATM machines or deal with a liquidity squeeze in the wholesale market and how well firms communicate and coordinate with authorities and each other.

According to one of the sources, there will be a particular focus on investment banking operations.

Regulators and firms are growing increasingly concerned about the threat of cyber-crime to the banking system, including the impact of coordinated online assaults or hacking attacks on specific banks. Recently, the Bank of England's Financial Policy Committee has urged the banks to strengthen their cyber-defence.

British police arrested eight people in September after a cyber-attack on the computer system of a branch of Barclays, just a week after 12 men were arrested for allegedly planning to steal millions of pounds from a Santander UK branch with a similar remote device.

Another global financial capital - New York – already performed a similar exercise, named Quantum Dawn 2, several months ago.

The first test of this kind in London was conducted in 2011 and consisted of a series of concerted cyber-attacks on the financial sector, disrupting wholesale and retail payments and online services. The exercise included more than 3,500 people and eighty-seven firms, hedge funds, asset managers and brokers, as well as banks, insurers and exchanges. 

Firms were asked to assume the test was carried out on the busiest day of the London 2012 Olympic Games, when many staff would not be in the office.

Next week's test will be the seventh market-wide exercise carried out by UK authorities to test the resilience of the financial industry to a variety of potential shocks.

Past events have included simulated storms, flooding and transport chaos in 2009 and a flu pandemic in 2006.

A report on the outcome of the test will be released late this year or early in 2014, one of the sources said

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