WASHINGTON, D.C. -- Representative Edward J. Markey (D-MA), Chairman of the House Energy and Commerce Subcommittee on Telecommunications and the Internet, responded today to the release of a Government Accountability Office (GAO) report he requested along with Energy and Commerce Chairman John Dingell and other Members of Congress to assess the progress financial market actors have made to ensure the security and continuity of major markets in the event of an infectious disease pandemic.Rep. Markey said, “The GAO report makes clear that although financial market participants have taken significant steps to improve their ability to withstand large-scale disasters, there are still serious gaps in their preparation. Only one of the seven critical financial organizations has a completed pandemic response plan. This lack of preparedness is unacceptable and irresponsible given the importance of the financial markets to our country’s economic health.”.”

The GAO report found that:

• Financial market participants have made progress on increasing the security and resiliency of our markets: “seven critical market organizations also have reduced the likelihood that their operations would be disrupted by disasters that affect their power or telecommunications services.” (p.12)

• However, only one of the seven critical financial organizations assessed by GAO had a formal pandemic-response plan in place: “only one of the seven organizations had a fully developed plan for addressing pandemic threats in place with detailed response plans for each business unit.” (p.15)

• Financial regulators have failed to set a date when pandemic disaster plans must be complete or provide specific directions to market organizations to ensure their plans are effective: “the formal statements that these regulatory agencies have issued do not specifically direct organizations to prepare plans likely to be effective during even severe outbreaks, nor have they established a date by which these plans should be completed.” (p.5)

• Despite progress made to reduce physical security and information security vulnerabilities, some of those improvements have created new vulnerabilities: “in some cases organizations have put in place new systems architectures that potentially introduce new vulnerabilities.” (p.17)

“The Bush Administration needs to set specific expectations and a reasonable deadline for market participants’ to complete effective continuity plans so that critical operations are not disrupted in the event of an infectious disease pandemic. If a widespread pandemic occurs in the United States, our economic stability will depend, in part, on whether our financial markets are able to continue secure operations. Now is the time for preparation, before the system is put to the test by a real-life disaster,” Rep. Markey concluded.

A full copy of the report is available through the GAO web site here (pdf document).