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The origins of CODISE

In the wake of the events of 11 September and under the impetus of comparable initiatives by US institutions (the Board of Governors of the Federal Reserve, the Office of the Comptroller of the Currency, the SEC), in 2002 the Banca d'Italia reviewed the business continuity plans established by major participants in the Italian financial marketplace. A conference with these institutions in February 2003 resulted in two key decisions:

- the institution of a working group on business continuity in the financial system (CODISE); and
- the creation of a "contact list" among the main financial institutions for use in the event of a severe financial system operating crisis.

CODISE's original tasks were:

- determining which services are "vital" to the financial marketplace;
- developing risk scenarios;
- planning integrated tests and trials;
- drafting business continuity rules and standards for important infrastructures.

Accordingly, the working group identified the financial services that are "vital" to the orderly functioning of the system, laid out risk contingencies and evaluated the interdependence between the main participants in the domestic financial marketplace. It developed strategies for action and methodologies for testing. The group's analytical work highlighted several factors:

- the essential role of some "vital" services in meeting economic agents' fundamental liquidity requirements, whose interruption even for a very brief interval would have severe impact on the operation of the financial markets (above all, the real-time gross payment and settlement system);
- the key role of reliable communications;
- the need to give banks a sufficient amount of time between the resumption of activity after an interruption and the end of the business day.

In addition, CODISE set the principal service resumption objectives for operators, which were then codified as part of the Banca d'Italia's guidelines on business continuity, issued in the second half of 2004.