GAO Report on Financial Market Preparedness: Significant Progress Has Been Made, but Pandemic Planning and Other Challenges Remain

GuidanceGovernment Accountability Office (GAO)General Information
Risk Management

FINANCIAL MARKET PREPAREDNESS

Significant Progress Has Been Made, but Pandemic Planning and Other Challenges Remain

Highlights of GAO-07-399, a report to congressional requesters

This is GAO’s third report since the September 11 terrorist attacks that assesses progress that market participants and regulators have made to ensure the security and resiliency of our securities markets. This report examined (1) actions taken to improve the markets’ capabilities to prevent and recover from attacks; (2) actions taken to improve disaster response and increase telecommunications resiliency; and (3) financial regulators’ efforts to ensure market resiliency. GAO inspected physical and electronic security measures and business continuity capabilities using regulatory, government, and industry-established criteria and discussed improvement efforts with broker dealers, banks, regulators, telecommunications carriers, and trade associations.

What GAO Recommends

To improve the readiness of the securities markets to withstand potential disease pandemics, securities and banking regulators should consider taking additional actions, including providing formal expectations that market participants’ plans address even severe pandemic outbreaks and setting a date by which such plans should be completed. Banking and securities regulators indicated they believe organizations are adequately addressing this risk, but will consider taking the recommended actions if progress lags. GAO believes that giving greater consideration now would better assure market readiness.

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