Home Banking & Finance Financial firms around the world ramp up their contingency plans as coronavirus...
Financial firms around the world ramp up their contingency plans as coronavirus hits
FRANKFURT/NEW YORK — Banks and other large financial companies in major cities across the world ramped up their emergency measures to combat the spread of the coronavirus on Tuesday, with Barclays Plc and BlackRock, Inc. confirming one case in their New York offices.
The steps including telling staff who had been exposed to someone with the virus to self-quarantine for 14 days, splitting operations so that some staff work from home or back-up locations and deep cleaning offices.
Barclays told staff on Tuesday that a trading floor employee in its Midtown Manhattan office tested positive for the virus and told employees who worked near or met with the individual to self-quarantine, according to a memo seen by Reuters.
Morgan Stanley also confirmed that an employee at its Purchase, New York, campus, roughly 45-minutes north of Manhattan, tested positive for the virus.
A BlackRock employee in its 40 East 52nd Street office in New York informed the company on Monday evening that they had been diagnosed with COVID-19, according to a spokesman. The employee had no symptoms, but the company did a deep clean and close colleagues were told to work from home for 14 days, the spokesman said.
The asset manager said business continuity plans were working, including provisions for teams to alternate working from the office and from home to limit exposure.
Starting Wednesday, Citigroup Inc. will divide its entire North America work force into two groups that will alternate working from the office and other places in one-week shifts, according to a source familiar with the plans.
Trading staff will largely report to backup sites and other teams like communications will work from home during off-weeks, the sources said.
Similar arrangements could pose risks for markets continuing to function smoothly, analysts said.
“With several large dealers having announced split staffs and widespread work from home arrangements, we believe markets are about to experience arguably the most significant large-scale operation risk event since 2001,” JPMorgan fixed-income market strategists wrote in a note on Tuesday.
In Europe, Deutsche Bank and BBVA reorganized operations after employees were infected.
Deutsche Bank has split some of its trading operations across sites in Frankfurt, while Spain’s BBVA has shut one building at its headquarters in Madrid.
The spread of the coronavirus is increasingly disrupting financial companies’ operations and adds to the impact of a weaker economy on their businesses.
“Banks will see a weakening of their loan book quality as the effects of the virus will reduce global travel and factory output, and dampen domestic demand in Europe,” Moody’s analyst Bernhard Held said.
Private equity firm KKR & Co. Inc. said late on Monday that an employee at its London office had tested positive, causing it to temporarily close both its sites in the city.
Standard Life Aberdeen said on Tuesday it was planning to split its British and US investment teams into groups and have them work separately as part of contingency planning.
Traders at the world’s biggest banks began last week swapping their plush city center offices to work from suburban outposts in New York and London, facing lengthy commutes as their employers attempt to reduce the disruption caused by coronavirus.
The measures by Deutsche on Tuesday are expected to affect dozens of people and last until at least March 27. The bank also split some operations in London on Monday, following similar moves in places including Italy and China.
“We expect no impact on our ability to operate our full range of services for our clients and recognize that this setup will require extra effort and discipline from all,” Deutsche said in a memo to staff. — Reuters