Case Study: Euroclear Bank applies BCM framework to manage impact of Lehman Brothers collapse


Written by Phil on March 31, 2009 in Business Continuity, Risk Management.

The collapse of Lehman Brothers in September 2008 occurred just two months after Euroclear Bank had run a major exercise to test such an occurrence. Euroclear’s application of the Business Continuity Management framework, specifically the tools and exercise methodology, to its core financial business contributed to an effective response to the impact of this financial crisis.

One of the questions raised by Euroclear’s management was whether the Business Continuity Management (BCM) framework and its elements, such as the crisis management structure, would be appropriate to deal with a financial crisis. Laure Molinier was the one tasked with this analysis.

Ms Molinier had earlier experience with the banking side of the business at Euroclear Bank, so with banking risk and operational risk sharing the same reporting structure under corporate risk management, she was well placed to lead the analysis. Many similarities exist between the methodology used to manage an operational and financial crisis. Indeed, for operational scenarios, the focus of the impact assessment will be on premises, IT and/or people; for financial scenarios, it will use the same methodology to assess the credit and liquidity impacts on critical activities. Specific response plans, such as facilities, IT disaster recovery and/or human resources were developed on the one hand for operational crises, and for financial crises, credit crisis procedures and liquidity contingency plans existed. In both cases, there is a common objective – to ensure continuity of services foremost and to thereby preserve the company’s reputation.

See Business Continuity Management Case Study: Euroclear Bank applies the BCM framework to manage the impact of the collapse of Lehman Brothers, from the Business Continuity Institute Partnership.

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For more insights on the issue of risk management as well as how it impacts business continuity, be sure to read A Risk Management Approach to Business Continuity: Aligning Business Continuity with Corporate Governance.


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