The Financial Conduct Authority is reviewing firms' contingency plans to assess whether they are suitably prepared for the coronavirus outbreak and its effect on day-to-day operations and client services.
In an update on its website, published today (March 4), the regulator said it is working closely with the financial services sector, including the Bank of England and HM Treasury, to ensure it is responding effectively to the coronavirus (Covid-19) outbreak.
This includes reviewing the contingency plans of a wide range of firms to check for any operational risks on day-to-day business as well as businesses’ ability to continue to operate effectively.
The regulator is also looking at what steps have been taken by firms to support customers during this period.
The FCA stated: “We expect firms to take all reasonable steps to meet their regulatory obligations.
“For example, 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.
“If firms are able to meet these standards and undertake these activities from backup sites or with staff working from home, we have no objection to this.”
The FCA is also working with firms to resolve any issues they may have and said it will keep its “guidance under review as necessary”.
At a Treasury committee hearing on his appointment as governor of the Bank of England today, outgoing chief executive of the FCA, Andrew Bailey, said coronavirus was “the first most pressing issue we face” and was evolving in “unprecedented and unexpected fashions”.
Mr Bailey said: “What struck me is that all the focus is on monetary policy. I think it is quite reasonable to suspect at some point we will have to provide supply chain finance to ensure the shock effects of the virus are not damaging to many forms of activity and we will have to move quickly to do that.”
This comes after outgoing governor of the Bank of England Mark Carney warned yesterday the economic shock from coronavirus "could prove large", but predicted any fallout would "ultimately be temporary".
Carney said the Bank was monitoring the potential impact of "confidence effects" on the market as a result of the outbreak.
He said: "The Bank will take all necessary steps to support the UK economy and financial system consistent with its statutory responsibilities.
"We are monitoring the situation closely across all our functions and ensuring all necessary contingency plans are in place."
The Organisation for Economic Co-operation and Development (OECD) warned this week the coronavirus crisis could see global economic growth fall from its previous estimate of 2.9 per cent to 2.4 per cent.
According to the inter-governmental body, a prolonged disruption could force growth down to as low as 1.5 per cent this year.
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