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FROM THE OFFICE OF PUBLIC AFFAIRS
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Treasury Secretary John Snow today praised the financial institutions and the men and women who make U.S. financial markets work for their initial response to yesterdays massive power outage. He also announced that the IRS will grant a one-week extension for taxpayers in the affected area to file their returns.
We applaud the initial response of critical financial institutions to the power outage,said Secretary Snow. The men and women who make our markets work did an extraordinary job of ensuring that our financial markets lived up to their reputation as the most resilient in the world.
Despite the power outage that caused disruptions in large parts of the United States and Canada, the U.S. financial system weathered the outage relatively well.
Even though outage began at about 4:11 pm EDT after the stock markets were closed, financial firms still had a considerable volume of after-market trades to process. But due to back-up systems, critical financial institutions were able to handle these functions.
The Treasury Department has received no reports of any major disruptions to the financial system, no reports of major damage to financial systems, and no reports of losses of financial data.
The nations financial system was largely unaffected by the outage due in particular to the steps the private sector has taken to enhance the resiliency of their systems.
Enhancements to the nations financial infrastructure include:
People. The men and women who make the financial system work have again shown great professionalism in a time of challenge. They have again shown great commitment to the safety of their colleagues, the health of their institutions, and the well-being of their customers. Many of these professionals have participated in numerous drills, simulations, and tests since September 11, 2001. Even when these exercises did not involve a response to a power outage, they helped further prepare the people who make the system work.
Procedures. After September 11, 2001, many institutions revised and improved their business continuity procedures. These new procedures appear to have helped the financial system weather the outage. Regular testing of systems and plans, combined with cross training of key employees, helped to ensure continuity of operations. For example, certain financial institutions implemented procedures to redirect operations to back-up facilities in areas not affected by the outage.
Systems. Many institutions have invested in new or upgraded business continuity equipment, including un-interruptible power supply systems and back-up generators. This enabled a number of institutions to seamlessly switch their information technology operations to back-up power sources, preserving the integrity of data and continuing the orderly processing of transactions.
Communication. Financial institutions did an excellent job of communicating their status to their employees, customers, and counter-parties. In particular, market participants are to be commended for their early commitment to open for business today despite the outage. In addition, the Financial Services Sector Coordinating Council did a superb job of sharing information within the industry and between the industry and the financial regulators.
Cooperation. The financial regulators worked together to share information and solve problems. Shortly after the outage, the Financial and Banking Information Infrastructure Committee (FBIIC), which is chaired by the Treasury and comprised of federal and state financial regulators, convened a conference call to discuss the impact of the outage on the financial sector. There also was good cooperation between financial regulators and state and local authorities.
The Department recognizes that while we are still in the process of restoring power and returning operations of utilities, transportation services, and the financial industry to normal, we are confident that the industry will continue to meet this challenge with the same success with which they have initially responded to the outage.
While the financial infrastructure and the markets are largely unaffected by the outage, individual taxpayers in the area have been affected. As a result, the Treasury Department today is announcing that it is granting additional time for taxpayers to file returns.
The Internal Revenue Service will offer relief for those hit by the power blackout in the Northeastern United States. The IRS will consider as timely any tax returns or payments due from today through Friday, Aug. 22, 2003 if they are completed by Aug. 22, 2003.
The IRS is doing the right thing for taxpayers by providing this important relief to those affected by the power outages in the Northeast,Secretary Snow said.
Interest will continue on any overdue taxes during this period, but penalties will be waived. To qualify for this relief, affected taxpayers should put NORTHEAST BLACKOUTin red ink at the top of the return relying on this relief.
We want to make sure that taxpayers affected by the blackout don't have to worry about today's filing deadline; its the least we can do, said Secretary Snow.