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Posted on Tue, Aug. 03, 2004
R E L A T E D    L I N K S
 •  In the Carolinas | Security precautions
 •  BofA breaks ground amid new warnings

Targeting of banks largely 'symbolic'

Experts say business would continue even in case of an attack

Staff Writer

With fears heightened that terrorists are targeting "iconic" financial institutions, experts said Monday such an assault would be an attempt to undermine capitalism but would not prove as devastating as attackers may hope.

And Charlotte, home to the nation's second-largest banking center, probably doesn't have much to worry about because the city is relatively unknown around the world and wouldn't send a big enough message if attacked, experts said.

The Homeland Security department warned Sunday that terrorists may strike well-known financial institutions such as the New York Stock Exchange and the Prudential Financial building in Newark, N.J.

Experts say terrorists are hoping to hit America where it hurts most -- its prosperity.

Banking consultant Bert Ely said banks can keep operating if an office or branch is attacked, even destroyed.

"What they are trying to do is hit visible symbols of American capitalism and the American presence in the financial world, versus the actual functionality of the system," Ely said.

Homeland Security Secretary Tom Ridge said Sunday the threat information was unusually detailed, leading the government to issue its first specific alert for an industry. Ridge also named as targets Citigroup center in midtown Manhattan and the World Bank and International Monetary Fund in downtown Washington.

Treasury Secretary John Snow said Monday the nation's financial system continues to operate normally, a testimony to its "resiliency and strength."

"People around the world rightly have confidence in the U.S. financial markets," Snow said, adding the Treasury Department has not been listed as a specific target in the latest terrorist threat warning.

Security involving the Securities and Exchange Commission, the Federal Reserve in Washington and the Bureau of Engraving and Printing, supplier of the nation's paper currency, was upgraded as well Monday.

Many of the financial industry's safety measures were put into place in preparation for Y2K. But banks learned an important lesson after Sept. 11, said Judith Matheny, a former FBI special agent and now a vice president of corporate security. Matheny, who declined to publicly name her financial firm employer, is a member of the American Society for Industrial Security International, a trade group.

Financial firms ramped up security measures and duplicated systems and databases that handle everything from accepting ATM deposits to tracking mortgage payments. Operational centers were moved hundreds of miles apart and housed in nondescript warehouses. The centers now rely on separate power and telecommunications systems, Matheny said.

"Terrorists who target financial services buildings haven't a clue how the financial services sector truly operates," she said. "They are looking to disrupt business. They won't."

Matheny said history shows terrorists most likely would choose to strike in a large city, such as New York, where the chance for "collateral damage" is higher than in a smaller city, such as Charlotte, which has few highrises.

Charlotte's banks were typically tight-lipped about security Monday.

Wachovia spokeswoman Christy Phillips wouldn't discuss specifics or say whether the bank was taking any new precautions, but she read a written statement saying that the company was evaluating its procedures based on the latest information and that safety was its top priority.

At a groundbreaking Monday for a Bank of America skyscraper in New York City, Chief Executive Ken Lewis said the company had increased safety precautions throughout its franchise and the threats would not alter his plans for the 51-story Manhattan tower.

Charlotte-Mecklenburg Police Chief Darrel Stephens said there will be no significant increase in security measures in the Queen City.

"People in the financial sector (in Charlotte) should pay close attention to their surroundings and let security and police know if something is out of place," Stephens said.

Financial institutions are logical targets because they represent imperialism, said Duke University finance professor Campbell Harvey.

"For terrorists, what really counts is the symbolism, not the number of people or the disruption in daily lives," said Harvey, who studies geopolitical risk.

Terrorists consider many factors when choosing targets, which Harvey describes as "symbolic" or "representing the heartland."

"Heartland" targets would be malls or theme parks. The goal in attacking those would be to create widespread fear that an attack could happen anywhere at anytime.

While Bank of America might seem to be a tempting target because of its name, Harvey believes terrorists will focus on banks based in larger cities, where they have the potential to create the most chaos.

"You can't underestimate these people," Harvey said of terrorists. "They have proven they can deliver. And they are focusing on things that supposedly represent the greatness of the United States." -- STAFF WRITERS ROB MOORE, SCOTT DODD, RICK ROTHACKER AND THE ASSOCIATED PRESS CONTRIBUTED TO THIS REPORT.


Corporate Risk

Domestic terrorism is on the minds of chief financial officers for a variety of companies, not just banks and securities firms.

A June 2004 survey of public and private companies, showed that domestic terrorism was their biggest fear. Of the nearly 200 CFOs surveyed, 43 percent rated domestic terrorism as the most significant risk to the U.S. economy for the coming year. Another 15 percent ranked the situation in Iraq as one of the top risks to their firms.

The survey, completed by Duke University, asked executives from a range of industries to choose the top three risks, from a list of 10, including inflation, oil prices and rising health care costs.

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