With many New York banks' foreign exchange desks expected to be
thinly staffed Monday as Hurricane Sandy bears down on the city,
their colleagues in London and elsewhere are being prepared for a
larger work load.
Earlier, New York Mayor Michael Bloomberg ordered a shutdown of
the Metropolitan Transportation Authority transit system as of 7
p.m. EDT (2300 GMT) Sunday, ensuring that many traders and salesmen
will be unable get into their offices. Those staffing constraints
pose a challenge for banks in the 24-hour currency market, because
their clients often maintain standing orders that are set to be
triggered when prices pass through designated levels.
Yet banks are insisting that it will be business as usual on
Monday for their forex teams. To live up to that promise, many have
put up staff in hotel rooms near their offices and have equipped
certain team members with equipment to trade remotely. But with
warnings of widespread power outages and flooding now in place
across the states of New York, New Jersey and Connecticut, those
planning on working from home may also be cut off as the
storm--currently classified as a Category 1 hurricane--passes
through the region.
So banks are also asking their foreign offices to pick up the
slack--especially those in London, where trading hours overlap with
New York's and where the largest players in the currency markets
tend to do the most business on any normal day.
Onur Sert, an emerging-market trader at Standard Chartered, said
his bank's London and Singapore offices will cover extra hours as
it expects to have only half of the New York trading desk in
place.
In an internal memo to all staff, Goldman Sachs Group Inc. (GS)
said the firm as a whole is "open for business" Monday but that
"given the potential severity of Hurricane Sandy" it would achieve
that by activating its "Business Continuity Plans."
"These include leveraging our teams in London and other
locations around the world for additional support, having
designated people work from our Greenwich and Princeton sites and,
for most of you, working from home," the memo said.
At Societe Generale SA (SCGLY, GLE.FR), foreign-exchange
strategist Carl Forcheski said the bank's New York team was
"technically open" but that it "will have to exercise best judgment
as to how to proceed." He added that existing standing orders would
"continue to be watched by our worldwide network."
A trader at BNP Paribas SA (BNPQY, BNP.FR) who asked not to be
named said about half the New York staff should be able to work and
that London will provide "backup as needed."
Electronic trading systems should help make the banks' job
easier as orders can be automatically executed from anywhere. Also,
the broader disruption to economic activity means that volumes
should be far thinner than normal, which will ease some of the
pressure on banks' resources.
The New York Stock Exchange said Sunday it would shut its
trading floor Monday, the first such shutdown in 27 years, and that
trading in all securities listed on the Big Board will be moved to
Arca, an electronic trading platform operated by New York Stock
Exchange parent NYSE Euronext (NYX).
Meanwhile, the Securities Industry and Financial Markets
Association, the securities industry trade body, said Sunday it is
recommending a noon EDT close Monday, a shift from its position
throughout much of the weekend, when it maintained that markets
should expect normal trading hours.
--Stephen L. Bernard, Matthew Walter and Cynthia Lin contributed
to this article
-Write to Erin McCarthy at erin.mccarthy@dowjones.com and
Michael Casey at michael.j.casey@dowjones.com
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