Despite the attacks on the US, the City hasn't looked to its defences.

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The 11 September terrorist attacks on the US have exposed a critical lack of disaster readiness among Britain's financial services companies. There is evidence that even now proper measures are not in place.

Warnings have come from a number of sources, including the main authority on the issue, the Business Continuity Institute. The BCI said that while Britain used to consider itself prepared, the recent events have caught companies off guard. This is particularly true for financial services, where business continuity is vital. Last week, a BCI project to test City readiness revealed that "everyone is going to have to seriously rethink their plans".

"11 September has drastically changed the odds," said BCI chief John Sharp. "Plans used to be based on a one in 22 million chance of a building being hit by a plane. Now those odds are a lot shorter." which described the industry's preparations as "woefully inadequate".

John Owen, Capco's chief executive, said that although many banks claim to have disaster recovery plans in place, these measures fall short by a long way. That this is an industry-wide trend is clearly shown in the US, he said, where many big banks are still working on slow computers in temporary offices. "No one has thought through business continuity for more than two or three days" he said. "The measures they have are in place to deal with a power failure or a flood, not the total loss of a building."

Based on his experience of working with dozens of big companies across the sector, Mr Owen has spotted a number of alarming trends, and criticised the lack of investment in emergency measures. "People ... are not prepared to spend money on disaster recovery centres," he said.

Firms such as Guardian IT and Insight, which specialise in preparing companies for worst-case scenarios, have been warning clients to reconsider the geographical location of their disaster recovery sites after it emerged that one big investment bank had its UK emergency centre just round the corner from its Liverpool Street offices. They have been advising more and more clients to base their recovery sites away from the City, preferably outside the M25. Both Guardian and Insight have said that while they expected a glut of inquiries after 11 September, the level of investment has been no different from normal.

The New York experience has also exposed the inadequacy of disaster plans where companies are based miles away. For instance, one big bank had a site to accommodate 50 staff, but found it had 500 staff needing an office.