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Treasury tightens security

Financial institutions must be protected, department says

WASHINGTON — The Bush administration on Tuesday said it had taken a number of steps to upgrade the security of the nation's financial markets against possible terrorist attacks.

As part of that effort, Treasury Department officials said that arrangements had been made for additional physical protection of critical financial institutions, using either federal resources or National Guard troops.

"We are determined that the financial markets continue to do business even during times of hostilities abroad or adversity at home," Treasury said in a fact sheet. "We continue to work with the financial and banking communities so that our financial system remains functioning efficiently and effectively."

The Sept. 11, 2001, terrorist attacks on the World Trade Center shut down New York Stock Exchange operations for four days because of damage to critical telecommunications and computer systems.

However, since that time, both the New York Stock Exchange and the Nasdaq stock market have established emergency backup procedures designed to prevent a terrorist attack from disrupting trading.

The Treasury said in a fact sheet that because of security considerations, the government could not disclose all of the steps that have been taken to protect the financial system.

But officials said that the payment and clearing systems for the various exchanges and banks that were most critical to keeping the financial system operating had been identified and various precautionary steps taken.

"In the event that hostilities abroad lead to an increase in the threat level at home, Treasury will communicate regularly with the other federal financial regulators regarding the situation," Treasury said.

With increased threat levels, procedures have been set up so that critical financial institutions will be able to increase security, both for their offices and for their computer systems.

The fact sheet said that Treasury officials have also set up procedures with other federal agencies to make sure that the government's critical financial functions, including the ability to borrow and make payments such as sending out Social Security and other benefit checks, will not be affected.