New York’s financial hub is looking to electronic trading and London to help it through any disruption during Hurricane Sandy, which is due to reach the US east coast today.
As the storm closes in on New York City several banks have made preparations to shift their trading activities to London, according to Dow Jones.
Closures of the transport systems in New York have meant that many traders have been unable to get into the office on Monday, which poses a challenge for banks in the currency market, because clients have standing orders that are triggered when prices pass through designated levels.
However, Citigroup, the world’s second-largest foreign exchange bank, has said that its London trading operations will be ‘picking up the slack’.
Australia’s Westpac Institutional Bank won’t have any of its 40 New York staff at their desks when Sandy hits. It said: “We will be covering the US time zone out of London and out of Sydney, so we’ll just run longer out of London.”
“It’s very seamless to be able to cover for each other and pass books off electronically.”
Electronic trading systems should allow banks to automatically execute orders from anywhere. The widely used EBS electronic currency trading platform is working as normal, said owner ICAP.
EBS is the largest voice and electronic interdealer broker for the global foreign exchange market and said its global operations group is providing additional backup.
Geoffrey Yu, a strategist at UBS, told Dow Jones: “Global banks are well prepared for such eventualities and even if traders can’t get in to New York, orders can be processed electronically, so the impact on markets will likely be limited.”
The BBC has reported, however, that New York based exchanges Nasdaq and NYSE have been forced to shut completely for the day. It is the first time in 27 years that the stock markets have closed for a full day due to adverse weather.