UK: Banks prepare for oil crisis

greenspun.com : LUSENET : Grassroots Information Coordination Center (GICC) : One Thread

World Business: Europe Banks prepare for oil crisis UK bankers make contingency plans as fuel shortages cost up to $350M a day September 13, 2000: 9:58 a.m. ET

LONDON (CNNfn) - Britain's bank chiefs met Wednesday to discuss emergency plans for combating the fuel crisis that threatens to paralyze the country.

As shortages at increasing numbers of gas stations kept many private and business drivers off the road, the banks said they had had few problems so far and would be able to keep the country stocked up with cash even if blockades of oil depots and refineries continue.

But surviving the fuel squeeze isn't without financial cost to employers. The London Chamber of Commerce calculated Wednesday that British business is losing up to #250 million ($352 million) a day, based on an estimate that roughly 10 percent of the economy's daily output is being lost. The retail, distribution and freight sectors are the hardest hit, the LCC said.

The Association for Payment Clearing Systems (APACS), the organization that runs Britain's inter-bank payment network, said it was talking to the government about ways to ensure fuel is available to keep security vans in operation to ferry cash to where it's needed, if gasoline shortages worsen.

Other contingency arrangements included redirecting deposits directly to bank branches to cut down on the transport usually needed from cash sorting centers to branches, Richard Tyson-Davies, spokesman for APCAS said.

Banks would also make more staff available in branches to meet customers' cash withdrawal needs if automated cash tellers run low, Tyson-Davies said.

Dusting off millennium plans

Some of the contingency plans were similar to those readied for the millennium, but APACS said it didn't expect to have to put them into effect. Problems might arise if the shortages continued into next week, APACS said, but it didn't foresee any difficulties meeting customer demand this week.

In an age of increasing dependence on electronic payment systems, "the need for cash is much, much less than it used to be," said Tyson-Davies.

As of Wednesday morning, the fuel shortage had affected some parts of the country's largest cash supplier, HSBC Holdings PLC, but a spokeswoman for the bank said there were no problems in making money available. There had been no panic withdrawal, she said.

At rival Barclays PLC, spokeswoman Pam O'Keefe said deliveries by the bank's inter-branch mail system had slowed down as a result of the shortage, but there was no effect on services to customers.

HSBC, Barclays and Lloyds TSB PLC all said that staff in some parts of the country had faced difficulties getting to work, for example at HSBC's call centers and at some branches in Yorkshire, northern England.

Protesters rail at high taxes

As crude oil prices soared in recent days, protesters picketed refineries and blocked roads to demand the government reduce the high fuel taxes that make gasoline even more expensive.

The majority of Britain's gas stations ran dry Tuesday and most still had no gasoline Wednesday. Tankers that had been blocked by protesters were starting to resume deliveries after the government provided police escorts.

In London, benchmark Brent crude oil for October delivery fell 54 U.S. cents to $31.94 a barrel on Wednesday. On the New York Mercantile Exchange the previous day, U.S. light sweet crude for October delivery settled at $34.28, down 86 U.S. cents after climbing as high as $35.85 earlier.

Investors showed their confidence in the resolution of the crisis, meanwhile, by buying shares in logistics firms Hays Plc and Exel Plc. The share price of the fuel-dependent firms rebounded Wednesday after dropping the previous day.

Exel, which was promoted to the FTSE 100 index in June under its previous name Ocean Group, was up 4.5 percent at 1,053.5 pence. It had fallen 6.5 percent on Tuesday.

Shares in support services group Hays, which provides specialized distribution services, were up 3.5 percent at 412 pence, after a 4.1 percent fall on Tuesday.

http://cnnfn.cnn.com/2000/09/13/europe/fuel_banks/

-- Martin Thompson (mthom1927@aol.com), September 13, 2000


Moderation questions? read the FAQ