Europe’s Banks Brace For Potential Power Cuts As Energy Crisis Intensifies
Potential blackouts and power rationing brought about by the energy crisis threatens Europe’s money system. To prevent ATMs and online banking from going dark, banks across Europe are getting ready to dim the lights to save power and are stress-testing ways to cope while they line up alternative power sources like generators, according to an analysis by Reuters.
Last week, Russian gas giant Gazprom brought the energy crisis to the next level when it announced that the Nord Stream 1 pipeline would remain closed beyond the scheduled three-day maintenance until “operational defects in the equipment are eliminated.” But on Monday, the Kremlin, blaming the West for the pipeline shutdown, said that it would remain closed until the sanctions preventing gas turbine repairs are lifted.
Some of Europe’s biggest banks have started to simulate power outages in the summer. A source told Reuters that JPMorgan (NYSE: JPM), which has thousands of employees across hubs in London and Frankfurt, could switch to diesel generators, depending on the severity of the blackout, to keep key locations running for several days.
Apart from planning on dimming the lights, these financial institutions have also started to reduce office space and consolidate staff into fewer buildings.
According to the Reuters analysis, Deutsche Bank is implementing a host of conservation measures in its 1,400 buildings in Germany. They aim to save 4.9 million kWh each year, an amount of power equivalent to lighting roughly 49,000 lightbulbs for an hour. Speaking of lights, the bank is switching off all interior branch lighting and illuminated overnight outdoor advertising.
It will also be adjusting workplace temperatures, along with many of Europe’s public spaces, and shutting off hot running water in their washrooms.
The analysis underscores the urgency of Europe’s preparedness, because of the crucial role of payments and transactions in the region’s economy.
“The banking system is part of other systems,” Gianluca Pescaroli, professor in operational continuity and disaster resilience at University College London told Reuters. He 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 have on other services such as the internet.”
Information for this briefing was found via Reuters, and the companies and sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
