Companies Prepare for Possibility of Pandemic

More than 2,500 banks and insurance companies recently participated in a United States Treasury Dept. computer exercise that simulated the effects of an avian flu pandemic in an effort to evaluate their preparedness in the event of widespread emergency. Valerie Abend of the Department of Treasury speaks with Liane Hansen about the exercise.

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LIANE HANSEN, host:

Are you concerned about what the credit crunch will do to your stock portfolio? Or the impact instability in the Middle East will have on that 401k? Well, here's something else to add to your sleepless nights. What would be the effects of a serious outbreak of bird flu - not just on your finances but on the entire American financial system?

The government has not only considered that scenario. It's planning for it. More than 2,500 financial institutions have completed a treasury department exercise to simulate how they'd function during a flu pandemic.

Valerie Abend is deputy assistant secretary for Critical Infrastructure Protection, and she joins us on the phone.

Welcome to the program.

Ms. VALERIE ABEND (Deputy Assistant Secretary, Critical Infrastructure Protection, U.S. Treasury Department): Thank you very much.

HANSEN: So this test lasted just over three weeks. Explain how it worked.

Ms. ABEND: Well, about a hundred members of the public and private sector came together over the summer to devise a scenario of a global pandemic flu outbreak that would make its way to the United States. And then, we opened up a registration through an online Web site.

And then starting in September, we released on a weekly basis scenario of what would be going on throughout the United States with regards to the reaction to the pandemic flu. We presented a number of components to a scenario.

And then every Wednesday of each week of the exercise, the participants went to a Web site to answer an anonymous survey and they reported on how they were responding through this online questionnaire to the various components of the scenario that we had provided to them.

HANSEN: Hmm. So you were doing things like - what? Pretending that people couldn't come to work, for example, because they were sick; people who couldn't come to work because they had to stay home with their kids because the schools were closing; people taking a lot of money out of those automatic teller machines because they weren't sure when they were going to get it again. Is that the kind of - were those the kind of components we're talking about?

Ms. ABEND: Exactly. Every week we would give a series of letters to the participants. And those letters represented the first letter of the last name of everyone within their financial institution. And those people, we told them, were just unavailable to work, so that we brought them from week to week to a different level of absenteeism because absenteeism is one of the key components that we'll be facing not just the financial service sector but all employers throughout the country.

HANSEN: So what do you think? Are financial institutions ready for the avian flu?

Ms. ABEND: You know, our sector has done a huge amount of work when it comes to pandemic preparedness. I would go out on a limb and say that they are some of the most prepared employers of this country.

HANSEN: Now, this test was avian flu specific. But do you think it could actually prepare banks and other institutions for other kinds of outbreaks as well?

Ms. ABEND: Absolutely. You know, one of the things I like about pandemic flu testing - no matter what the crisis is, it's never necessarily the crisis that you will be faced with. And pandemic flu exercise testing really tests to the limit all components of your organization - everything from employee communication and human resource management to how to deal with telecommuting, how to deal even with counseling your employees, for example, after a major catastrophic event.

There really isn't a component that the pandemic flu doesn't consider. And so I like the creativity that a pandemic flu scenario provides. And I think it's a really worthwhile scenario to depose.

HANSEN: So bottom line, do we need to worry about our bank accounts and retirement plans and insurance policies?

Ms. ABEND: I think it's always good to pay attention to your personal finances. I would always do that. And I think when it comes to pandemic preparedness, it will be a global event. But the financial services sector works really well not only in of itself but certainly with the broader community, and I think we'll be better off prepared having done this exercise.

HANSEN: Valerie Abend is deputy assistant secretary for Critical Infrastructure Protection at the U.S. Treasury Department. Thanks for your time.

Ms. ABEND: Thank you.

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