# Analysis-Europe’s banks dim lights as they brace for winter blackout
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-09-07
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: Europe's Biggest Banks Brace for Potential Power Cuts
Meta Description: As Europe faces potential power cuts from Russia's gas supply throttling, big banks are planning back-up generators and energy-saving measures to ensure
URL: https://financedigest.com/analysis-europes-banks-dim-lights-as-they-brace-for-winter-blackouthtml

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By Sinead Cruise and Iain Withers

LONDON (Reuters) – Some of Europe’s biggest banks are preparing back-up generators and to dim the lights as they brace for potential power cuts and energy rationing that threaten the money system underpinning the region’s economy.

As Russia throttles gas supplies to the continent, banks are stress-testing how they can cope with power shortages and lining up alternative sources of energy, such as generators, so that ATMs and online banking don’t go dark.

There is a special urgency for financial [firms to act because of the importance of payments and transactions to Europe’s](https://www.financedigest.com/analysis-rate-rises-pile-pain-on-sme-firms-in-u-s-and-europe.html "Analysis-Rate rises pile pain on SME firms in U.S. and Europe") economy, already fragile due to the fallout of war.

While the sector adapted to COVID-19 lockdowns and [remote working](https://www.financedigest.com/shoring-up-cyber-defences-in-the-remote-working-era.html "Shoring up cyber defences in the remote working era"), power blackouts or rationing present a very different challenge. The banking system is part of other systems,” said Gianluca Pescaroli, professor in [operational continuity and disaster resilience](https://www.financedigest.com/2021-predictions-operational-resilience-takes-center-stage.html "2021 Predictions: Operational Resilience Takes Center Stage") at University College London, who has advised authorities in London on power outages. “My main concern is the cascading effects on society of failures to ATMs or cashless transactions. Similarly, the [dependencies banks](https://www.financedigest.com/seven-out-of-ten-uk-adults-aged-25-44-never-seek-advice-on-dealing-with-debts-despite-depending-on-the-bank-of-mum-and-dad.html "Seven out of ten UK adults aged 25-44 never seek advice on dealing with debts despite depending on the bank of mum and dad") have on other services such as the internet.” JPMorgan, which employs thousands across European hubs in London and Frankfurt, has conducted power outage simulations, a source familiar with the matter told Reuters. Depending on the severity, the [bank could switch](https://www.financedigest.com/new-legislation-makes-switching-bank-accounts-simples.html "New legislation makes switching bank accounts “simples”") to diesel generators that could keep key office locations up and running for several days, the person said.

The biggest U.S. bank lends [money](https://www.financedigest.com/marketmind-banks-are-leaking-money.html "Marketmind: Banks are leaking money") to companies in Europe and trades stocks and bonds in addition to running a British consumer bank. Italy’s second-biggest [bank UniCredit has tested](https://www.financedigest.com/what-to-make-of-the-headlines-brexit-and-bank-of-england-policy-eba-bank-stress-tests.html "What to make of the headlines? Brexit and Bank of England policy, EBA bank stress tests") its operational resilience this summer, a source familiar with the plans said. Its latest disaster recovery test focused on the resilience of [data processing, the source said, adding the bank’s two core data centres](https://www.financedigest.com/keysource-awarded-major-contract-to-design-nationwide-network-of-data-centres-throughout-china.html "KEYSOURCE AWARDED MAJOR CONTRACT TO DESIGN  NATIONWIDE NETWORK OF DATA CENTRES THROUGHOUT CHINA") had power supply from two independent power stations. It’s unclear how long its power would last. Euronext, which runs the French and Italian stock exchanges, said it had reassessed its energy use since [Russia’s invasion of Ukraine](https://www.financedigest.com/russia-promises-to-scale-down-operations-in-northern-ukraine.html "Russia promises to scale down operations in northern Ukraine"), adding it had back-up generators, without elaborating.

HOT WATER

[Banks are also taking visible steps to acknowledge the energy crisis](https://www.financedigest.com/how-the-2023-banking-crisis-unfolded.html "How the 2023 banking crisis unfolded"), such as paring office space and consolidating staff in fewer buildings.Deutsche Bank said it was rolling out a slew of energy saving measures across its 1,400 buildings in Germany, to [save 4.9 million kWh of electricity each year – enough](https://www.financedigest.com/80-of-workers-not-saving-enough-for-retirement.html "80% of workers not saving enough for retirement") to power roughly 49,000 light bulbs for an hour. The lender is shutting off hot running water in washrooms, adjusting workplace temperatures, switching off all interior branch [lighting and illuminated outdoor advertising](https://www.financedigest.com/playground-xyz-shines-a-light-on-the-nuanced-interplay-between-context-creativity-and-attention-for-advertisers-in-new-study.html "Playground xyz shines a light on the nuanced interplay between context, creativity and attention for advertisers in new study") overnight. The fountain in front of its head [office in Frankfurt will also be turned](https://www.financedigest.com/ireland-to-turn-heat-down-in-public-buildings-shut-empty-office-floors.html "Ireland to turn heat down in public buildings, shut empty office floors") off. Regulators are on high alert. The supervisory arm of the [European Central Bank](https://www.financedigest.com/ecbs-villeroy-rate-hike-signals-strong-confidence-in-european-banks.html "ECB’s Villeroy: rate hike signals strong confidence in European banks") and its equivalent UK peer, the Prudential Regulation Authority (PRA), both require lenders to have plans to cope with disruption.

Firms in Britain are required to identify their [“Important Business](https://www.financedigest.com/the-importance-of-property-care-looking-after-your-business.html "The Importance of Property Care: Looking After Your Business") Services” and the methods of resolving vulnerabilities should threats materialise.

Nonetheless, experts fear that few companies are prepared for lengthy blackouts of more than a few days. This represents a serious gap in resilience planning,” said Avi Schnurr, CEO of the Electric Infrastructure [Security Council](https://www.financedigest.com/durham-county-council-reduces-data-log-analysis-costs-by-50-with-real-time-analysis-and-security-tool.html "Durham County Council reduces data log analysis costs by 50% with real-time analysis and security tool"), a think-tank that advises on preparing for such hazards.

[Banks should already be making arrangements to ensure](https://www.financedigest.com/challenger-banks-ensuring-trust-in-your-email.html "Challenger banks: Ensuring trust in your email ") that they can cope even in a prolonged power outage, with agreements for transactions to be logged retroactively once systems are back online, he said. BNP Paribas, France’s biggest bank, is addressing power consumption across the approximate 2,750 branches, offices and data centres it operates across France, Belgium and Italy, a source [close to the French](https://www.financedigest.com/nestle-closes-french-buitoni-factory-hit-by-e-coli-outbreak.html "Nestle closes French Buitoni factory hit by E.coli outbreak") lender said.

The possibility of electricity supply cuts was being [“closely monitored” and covered by the Business Continuity Plan in place at the bank](https://www.financedigest.com/banking-stability-worries-go-behind-closed-doors-at-imf-world-bank-meetings.html "Banking stability worries go behind closed doors at IMF-World Bank meetings").

European gas prices have surged after Russia’s state-controlled Gazprom said it would indefinitely extend a shutdown to the major [Nord Stream](https://www.financedigest.com/denmark-invites-nord-stream-operator-to-help-salvage-unidentified-object.html "Denmark invites Nord Stream operator to help salvage unidentified object") 1 gas pipeline.

[Europe has accused Russia of weaponising energy](https://www.financedigest.com/europes-energy-crisis-and-the-nuclear-path-out.html "Europe’s energy crisis and the nuclear path out") supplies in retaliation for Western sanctions imposed on Moscow since the outbreak of hostilities with Ukraine. [Russia blames those sanctions for causing the gas supply](https://www.financedigest.com/exclusive-kazakh-mcdonalds-shut-outlets-temporarily-after-halting-supplies-from-russia-sources.html "Exclusive-Kazakh McDonald’s shut outlets temporarily after halting supplies from Russia – sources") problems, which it puts down to pipeline faults.

In Britain, [rising energy costs](https://www.financedigest.com/suedzucker-quarterly-profits-surge-73-5-despite-cost-rise.html "Suedzucker quarterly profits surge 73.5% despite cost rise") are squeezing businesses and consumers, who are facing runaway inflation.

State-backed NatWest said it had partially mitigated the [financial hit](https://www.financedigest.com/uk-consumer-mood-hits-one-year-high-but-financial-gloom-persists.html "UK consumer mood hits one-year high, but financial gloom persists") by hedging future costs of its energy.

Major [insurers](https://www.financedigest.com/different-countries-different-insurance-cultures-how-insurers-can-adapt-their-products.html "insurers") also said they were cutting their energy use. Switzerland’s Zurich said it would [darken offices at night and mothball “decorative power consumers”](https://www.financedigest.com/britains-next-sees-lower-profit-in-2023-as-consumer-outlook-darkens.html "Britain’s Next sees lower profit in 2023 as consumer outlook darkens") like fountains.

Should the crisis worsen, the [sources said companies will take more drastic steps](https://www.financedigest.com/twitter-ceo-jack-dorsey-to-step-down-source.html "Twitter CEO Jack Dorsey to step down – source"). And while staff may notice, the [firms are hoping that customers](https://www.financedigest.com/99-financial-firms-expect-benefit-open-banking-improved-customer-onboarding-main-driver-adoption.html "99% of financial firms expect to benefit from Open Banking, with improved customer onboarding the main driver of adoption") won’t.

Additional measures that can be taken should the energy situation worsen include using only certain floors of the buildings, and the shutdown of certain [services such as the employee](https://www.financedigest.com/four-tips-to-help-reduce-employee-ghosting-in-financial-services.html "Four tips to help reduce employee ghosting in financial services") gym,” the insurer said.

(Additional reporting by Julien Ponthus in [Paris and Carolyn Cohn in London; editing by Elisa Martinuzzi, John O’Donnell and David Evans)](https://www.financedigest.com/london-fears-losing-luxury-shoppers-to-paris-and-milan.html "London fears losing luxury shoppers to Paris and Milan")


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