The Canary Wharf financial district is seen from the construction site of 22 Bishopsgate in London, Britain June 25, 2019. Reuters/Hannah McKay
As the coronavirus spreads, British bankers are preparing to use trading sites miles from London’s City and Canary Wharf -- and their regulators are keeping a keen eye on that contingency planning.
Goldman Sachs Group Inc. is actively testing its backup trading operations in the south London neighborhood of Croydon, according to a spokesman for the Wall Street firm. JPMorgan Chase & Co. is preparing for potential staff moves to back-up sites in London and Basingstoke, 45 miles southwest of the British capital, according to people familiar with the bank’s plans.
The Financial Conduct Authority indicated Wednesday that it’s making sure firms don’t scrimp on compliance as they dust off backup plans and test computer systems.
"We would expect firms to be able to enter orders and transactions promptly into the relevant systems, use recorded lines when trading and give staff access to the compliance support they need,” the FCA said in a statement.
London’s financial district employs 522,000 people, or 10% of the total workforce in the metropolis, according to the City of London Corporation. The FCA regulates a global financial hub that’s home to a $6.6 trillion-per-day foreign-exchange trading market, a massive derivatives clearinghouse and investment firms from around the world.
Given London’s importance to global markets, there could be ramifications if many traders are off sick or if the use of backup facilities is a drag on efficiency. While the U.K. hasn’t been as hard-hit by the virus as China or Italy, cases are continuing to rise. The virus outbreak drove the Federal Reserve to cut rates in an emergency meeting Tuesday, and the Bank of England is weighing similar measures.
For JPMorgan, some senior staff will be required to continue working from JPMorgan’s major offices in Canary Wharf and on the Embankment. Teams will be split up to ensure greater resilience in the event of illness-related absences, the people said.
UBS Group AG, which runs a major part of its European investment bank from London, has said it’s banning all employees from international travel that’s not business-critical. Staff who've traveled to, from or through China, South Korea, Italy or Iran are required to work from home or take a leave of absence for 14 days following their return.
BNP Paribas SA’s backup sites include one in Romford, on London’s eastern fringe. The French bank is monitoring the situation but hasn’t started to move traders from the firm’s Marylebone base, according to a person with knowledge of the contingency plan.
According to a person familar with Morgan Stanley’s plans, it’s testing trading systems at its own backup site on the other side of London, near Heathrow Airport.
Representatives at JPMorgan, Morgan Stanley and BNP Paribas declined to comment.
