Still, Y2K was valuable to the financial community in so far as it opened our minds and increased our sensitivity for problems that nobody had encountered or envisaged before. Today, however, the situation is different and considerably more complex. The events of September 11, 2001, have clearly increased our awareness further. Looking back to the time before the attacks we seem to have tended to underestimate the probability and consequences of disruption. So what needs to be done to make sure that we do not continue to underestimate threats? How can the resilience in financial systems be improved? What are the responsibilities of each and all of us? At the level of a single financial institution objectives and measures - in terms of back up solutions, staff safety and training, testing procedures, and contingency planning in general - may have to be newly defined. A specific issue that has probably not yet received enough attention everywhere is the internal crisis management process. Establishing a crisis management committee, which coordinates decisions and communication in times of crisis, can be vital, especially for large and complex financial institutions acting globally. On top of this, crisis management needs to be tested in general. One of the simpler scenarios could be: what happens if a bank is - for whatever reason - not able to release S.W.I.F.T. messages? In addition, crisis management of a single institution must involve its customers, its business partners and peers, its service providers and its utility providers. Crisis management is therefore a very demanding activity.
BIS Review 55/2002  3  Finally, central banks must always keep in mind that they carry a big responsibility for resilience and stability through their role as liquidity providers. Time and time again, free and easy access to liquidity has proven to be essential in large-scale crises. Since central bank liquidity is usually granted against collateral, the linkage between the payment and the securities settlement systems has to be especially robust. The market participants have to know and understand the conditions of access to lending of last resort facilities provided by central banks so that they can shape their contingency planning and collateral portfolios accordingly. Simultaneously central banks have to take the necessary precautions to increase resilience at their own end. Costs and benefits of resilience Let me add some remarks on the costs and benefits of improving resilience. My conviction will not come as a surprise to you: investment in resilience does indeed pay out for the financial sector as a whole and for society at large, but it also pays out for financial market infrastructures and for each and every financial firm. In other words, I have no doubt that more still needs to be done at the level of single institutions, and, on top of that, at the level of the financial industry as a whole.