Government supervisors remain concerned about pandemic preparedness. On December 12, the Federal Financial Institutions Examination Council (FFIEC) issued additional guidance for use by financial institutions in identifying the continuity planning that should be in place to minimize the potential adverse effects of a pandemic. The new guidance expands on the Interagency Advisory on Influenza Pandemic Preparedness issued in March 2006.

Publication of the FFIEC’s latest guidance comes close on the heels of the Treasury Department’s release of the preliminary results of an industry-wide pandemic flu exercise conducted by Treasury, the Financial Services Sector Coordinating Council for Critical Infrastructure Protection and Homeland Security, and the Securities Industry and Financial Management Association.

More than 2,700 organizations, mostly banks, participated anonymously in the exercise. The test found that 36 percent of participants had no business continuity plan (BCP) for a pandemic. Treasury also reported that 97 percent of participants found critical gaps in their plans.

“Pandemic planning presents unique challenges to financial institutions,” the FFIEC said in its new guidance. “Unlike most natural or technical disasters and malicious acts, the impact of a pandemic is much more difficult to determine because of the anticipated difference in scale and duration. As a result of these differences, no individual or organization is safe from the potential adverse effects of a pandemic event.”

The FFIEC reminded financial institutions that the potentially significant effects a pandemic could have on an institution justify establishing plans to address how each institution will manage such an event.

The new guidance calls for an institution’s BCP to address pandemics and provide for a preventive program, a documented strategy scaled to the stages of a pandemic outbreak, a comprehensive framework to ensure the continuance of critical operations, a testing program, and an oversight program to ensure that the plan is reviewed and updated.