The Bank of England (BoE) has issued a reminder to financial market infrastructures (FMIs) regarding the operational resilience policy ahead of its March 2025 deadline. In a speech delivered on 30 April by the BoE’s executive director Sasha Mills, the central message emphasised the necessity for FMIs to effectively respond to and recover from potential disruptions to maintain stability within the market or payments ecosystem.

Mills underscores the significance of FMIs and how the BoE defines operational resilience, setting clear priorities for these entities to fortify their operational resilience capabilities. Expectations outlined by the BoE for the upcoming year include the assurance of robust response plans and capabilities, alongside strategic investment where necessary. “For the calibration of impact tolerances, we expect to see greater engagement than we have seen thus far between FMIs, their participants, and the wider market”, adds Mills.

“FMIs need to do further work to improve on the sophistication of their testing approaches, looking for testing methods in addition to tabletop and desktop exercises”, the BoE executive director highlights. FMIs should enhance the sophistication of their testing approaches and ensure alignment between planned scenarios and identified risks and vulnerabilities. 

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Extreme but plausible

The speech concluded with Mills articulating five key messages, emphasising the importance of recognising FMIs’ role in financial stability, the inevitability of operational disruptions, and the need for meticulous scenario testing.

As financial landscapes evolve, Mills urges FMIs to adopt a forward-thinking approach. This proactive stance, she argues, is essential in preparing for potential disruptions “Think the unthinkable. Yesterday’s ‘unlikely’ may be tomorrow’s reality – and FMIs need to consider this when deciding what scenarios are extreme but plausible.”