The recent closure of the Nord Stream 1 gas distribution pipeline has adversely affected European households and businesses. Financial institutions across Europe are not left out. Top banks in the continent are preparing for possible blackouts and trying their best to reduce costs.
Top Banks Braces For Possible Outage
The potential energy scarcity caused by closing gas supply to Europe caused energy prices to increase. This has affected the continent’s economy. Just like everyone, the banking sector is also preparing for possible energy scarcity in the coming winter.
Although the sector survived the threat posed by COVID-19, this appears to be a different case entirely. Top banks in the continent are checking the possibility of them surviving the coming decline in the power supply.
Just like the banks rely on power supply, amongst other things, the economy also depends on the financial services provided by banks. Some banks are looking for other sources of power to keep their online banking services and ATMs running as a power outage looms.
UniCredit, the second largest bank in Italy, recently examined its functional strength. They tested the soundness of their data processors and also ensured two self-reliant power stations back to their primary data centers.
Meanwhile, Euronext backed up its power supply with two generators when it accessed its energy at the beginning of the Ukraine invasion. The American bank, JPMorgan, which has branches in Frankfurt and London, also tested the capacity of their power supply. They might switch to diesel generators if things get worse.
Regulatory Bodies Advised The Banks
Regulatory bodies advised financial institutions to devise ways to keep their essential services running despite a prolonged energy shortage. It is, however, feared that most banks can’t withstand an extended energy outage.
Regardless, banks are also making efforts to ensure they survive this crisis. For instance, Deutsche Bank disclosed they plan to save about 4.9M kWh, which can light about 4900 bulbs for ten hours. They added that they’d suspend restrooms’ running hot water and off lights that are not compulsory.
The biggest bank in France, BNP Paribas, recently monitored the power usage across its home and abroad branches. Zurich Insurance Company also disclosed they would work in darker rooms at night and off fountain lights to reduce power usage.
The Russians recently extended the closure of the Nord Stream 1 pipeline. Europe believed Russia deliberately halted gas supply to punish them for their sanctions due to the Ukraine attack.
Conversely, Russia believes European sanctions caused the gas crisis. The resultant increase in gas rates, in the middle of inflation, is jointly punishing households and businesses across Europe.
