Federal Reserve BoardNS/EP Initiatives Ken Buckley February 17, 2005
Why is Telecommunications Important to Financial Services • Resilience of U.S. financial system in the event of a wide scale disruption rests on the rapid resumption and recovery of the clearing and settlement systems • Reliability of telecommunications infrastructure is indispensable • Developed and regularly test disaster recovery plans • Established multiple data centers • Installed backup power, water, etc.
TSP and Federal Reserve NS/EP Services • TSP helps reduce systemic risk in payment systems to ensure liquidity • Qualifying National Security/Emergency Preparedness (NS/EP) functions include Fedwire, Treasury Open Market functions, and Central Bank functions • Published TSP sponsorship policy in 1992 and revised it in 2002 to include other large-dollar payments systems where prolonged outages would cause systemic risk
Lower Manhattan Landscape • Federal Reserve Bank of New York (FRBNY) occupies three buildings in Lower Manhattan • Within Lower Manhattan are: • bank holding companies • worldwide banking organizations • securities firms • property/casualty insurers • Home to more than 180,000 financial sector employees
Looking out the southeast corner of West Street. DACS and Access equipment on the right
Lessons Learned from 9/11 • Requests for expedited TSP service must be initiated quickly • Close communications between requestors and service providers to coordinate installation of new service is necessary • GETS was invaluable in establishing immediate communications with affected areas • TSP priority provisioning enabled nearly uninterrupted operations of payment systems • On-going testing is a critical component for ensuring continued preparedness of financial services
Lessons Learned from 9/11(continued) • Expanded sponsorship to include end-to-end transactions • Worked with other regulators to coordinate consistent NS/EP policies • A by-product of our TSP program is our continued ability to better understand the U.S. Financial sector and the pressure points that need to be considered for NS/EP
FRB Support of NS/EP Planning Activities • NSTAC Financial Services Task Force focusing on diversity, redundancy and recoverability • NRIC group convened by FCC to develop sound practices for telecommunications service providers • ATIS pilot effort to assure physical diversity for critical financial services telecommunications circuits • Priority Services Work Group (PSWG) to enhance overall effectiveness of the TSP program • NS/EP services reaching critical juncture with evolution of next generation network (circuit switched versus IP packet network)