Federal Reserve Board NS/EP Initiatives

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Federal Reserve BoardNS/EP Initiatives


Ken Buckley February 17, 2005
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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.

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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

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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

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5-ESS Switch at Verizon West Street Facility
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Looking out the southeast corner of West Street.
DACS and Access equipment on the right
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5ESS on the 7th floor in the southeast corner
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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

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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

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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)