Banks walk fine line in preparing for a coronavirus outbreak in U.S.

Register now

The U.S. banking industry has quietly begun workplace, travel and business-line preparations in the event of an outbreak of the new coronavirus in this country.

Health officials have tried to strike a delicate balance in tone between reassurance and preparedness, noting the limited number of U.S. cases reported so far but warning this week that, as one Centers for Disease Control and Prevention official put it, “it’s not so much of a question of if this will happen anymore but rather … when this will happen.”

Virus-related news photo

Banks seem to be taking a similar tack. They are treating it as watch-and-wait situation — they will ready plans behind the scenes and activate them when and if they get the signal from state and federal health officials.

Preparations for the virus, known as COVID-19, could include work-from-home scenarios and, for some banks with global operations, separating employees into different groups to help contain the spread of the disease. The Financial Times on Wednesday reported that Bank of America, Goldman Sachs and Morgan Stanley are crafting “split operation” strategies in which workers would take turns being in the office.

Of numerous banks contacted Wednesday by American Banker, few were willing to discuss their plans in any kind of detail.

TD Bank in Cherry Hill, N.J., said in a statement it is implementing plans across its markets “to address potential developments, maintain business continuity and keep [its] employees and customers informed” about the spread of coronavirus.

Synovus Financial in Columbus, Ga., said it is providing updates to its employees, including links to briefings from major public health organizations. It even maintains what it called pandemic kits that include disinfecting wipes, disposable respirators, vinyl gloves and first-aid supplies at all branches and corporate offices.

“Our business continuity planning and testing process addresses pandemic response scenarios and includes increased use of work-from-home arrangements,” a company spokesman said. “We regularly conduct crisis management exercises, which include communications capabilities and impact coordination assessments across our footprint.”

Most banks played things close to the vest, perhaps in an effort to avoid stoking panic among employees, customers and investors. Stocks calmed Wednesday after tumbling more than 1,900 points on Monday and Tuesday, but the Dow Jones industrial average surrendered gains in the afternoon ahead of President Trump’s scheduled address to the nation on the health threat. The KBW Nasdaq Bank Index was off 1.46%, to 98.04.

KeyCorp in Cleveland and PNC Financial Services Group in Pittsburgh say they have pandemic response plans and procedures in place, should they need to use them. Both say they are monitoring information from the CDC and reinforcing best health practices in offices and branches. Neither would provide more details about their exact plans and it is not known if they have put employee travel restrictions in place in the wake of the spread of coronavirus around the globe.

A spokesman for M&T Bank in Buffalo, N.Y., said the bank's corporate pandemic response team is "actively engaged and monitoring the situation."

JPMorgan Chase has not enacted a response plan for its U.S. business. But a spokesman said Wednesday that the largest bank in the country continues to restrict employee travel to and from mainland China and, this week, asked workers who have returned from northern Italy in the past 14 days and show any flulike symptoms to work from home for 14 days. In addition, the New York City-based bank now requires all business travel to and from Italy to be approved, as the outbreak in Italy continues to worsen.

Similarly, Goldman Sachs said it is limiting all business travel to, from and within South Korea, along with the Lombardy and Veneta regions in Italy. The investment bank is also requiring all employees who’ve traveled to South Korea or affected regions in Italy to remain out of office for at least 14 days and it is requesting all nonessential business travel to other parts of Italy and Asia be postponed.

Calls and emails to Wells Fargo, Fulton Financial in Lancaster, Pa., and Huntington Bancshares in Columbus, Ohio, and others seeking comment on coronavirus response plans were not immediately returned.

The American Bankers Association said that in early February it created a website that provides its members a list of resources to help banks prepare for a possible pandemic and prevent disruptions to their business operations.

“ABA staff experts have also participated in regular conference calls with representatives from other industry groups and relevant federal agencies to share information about the virus and potential challenges it may pose to businesses including banks,” the trade association said. “We will continue that close coordination and provide our members with updates as appropriate.”

Some of the advice is the same that is being extended to all types of employers: encourage sick workers to stay home, separate those with severe respiratory illness from others, promote coughing etiquette and handwashing, provide disposable wipes and perform routine environmental cleaning, as well as other steps.

Meanwhile, federal banking regulators have directed banks to their guidance on “pandemic planning” from 2007 that was issued amid the spread of the H5N1 virus, or the “bird flu,” around the globe. However, health officials have yet to label the coronavirus as a pandemic.

“Experts believe the most significant challenge may be the severe staffing shortages that will likely result from a pandemic outbreak,” the agencies said in the document urging banks to document plans to keep critical operations going.

In a briefing Tuesday on the quarterly banking profile, Federal Deposit Insurance Corp. officials said they would not be issuing new guidance yet for the current coronavirus outbreak, but they indicated they might take another look.

“It’s something we should probably update at this point in time,” FDIC Chair Jelena McWilliams said at the briefing.

Kathy Kraninger, the director of the Consumer Financial Protection Bureau, currently chairs the Federal Financial Institutions Examination Council, which put out the 2007 guidance. The FFIEC is in discussions about updating the 2007 "pandemic planning" guidance to banks, according to a source familiar with the talks.

Laura Alix, Jon Prior and Dean Anason contributed to this article.

For reprint and licensing requests for this article, click here.
Coronavirus Risk management Consumer banking Commercial banking Regional banks TD Bank Synovus Financial JPMorgan Chase Charles Goldman FFIEC