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* Exercise to be run out of City of London venue Tuesdayafternoon
* Hundreds of staff involved in offices as test plays out
* Bank of England has told banks to strengthen defences
By Matt Scuffham
LONDON, Nov 12 (Reuters) - A cyber attack on financialmarkets will be played out in one of London's historic hallslater on Tuesday in a "war game" simulation designed to test theCity's defences against online saboteurs.
Dozens of bankers, regulators and government officials willgather in Plaisterers' Hall in the heart of the City to assesshow London would cope with a bombardment of disruptions, such asa major attack on computer systems hitting stock exchanges andunfolding on social media, sources told Reuters.
Beyond Plaisterers Hall, the historic home of the plasteringindustry and a venue for banquets and conferences, hundreds morepeople will take part from their offices in the test, dubbed"Waking Shark II".
Simulations will focus on wholesale markets and how wellbanks and firms communicate and coordinate with authorities andeach other, one of the sources said.
The exercise, one of the largest of its kind in the world,follows a similar large-scale simulation in New York this yeardubbed "Quantum Dawn 2" and comes amid heightened fears over thethreat from hacking and cyber attacks.
"Hacking is now widespread and the attackers range from theintellectually curious through to sophisticated nation states,the targets range from safety-critical processing systemsthrough to price sensitive deal data," said Stephen Bonner, apartner in KPMG's Information Protection & Business Resilienceteam.
"This is a good opportunity to iron out any flaws now,before our cyber defences are tested in anger."
The London event is being co-ordinated by the Bank ofEngland, the Treasury and the Financial Conduct Authority andfollows a similar exercise two years ago.
Institutions involved in this year's test include Barclays, BNP, Bank of America, CHAPS,Commerzbank, Credit Suisse, Deutsche Bank, Euroclear, Goldman Sachs, HSBC, JPMorgan, LCH Clearnet, London Stock Exchange,Morgan Stanley, Nomura, Royal Bank of Scotland, SocGen, SWIFT and UBS, according toa source familiar with the matter.
Others such as Britain's biggest retail bank, Lloyds, are attending as observes, sources said.
Regulators and companies are growing increasingly concernedabout the threat of cyber crime to the banking system, includingthe impact of coordinated online assaults or hacking attacks onspecific lenders. The Bank of England has told banks tostrengthen their defences against cyber attacks.
One unidentified London-listed company incurred losses of800 million pounds ($1.29 billion) in a cyber attack severalyears ago, according to British security services.
Andrew Wingfield, a London-based partner at law firm, SJBerwin, said the outcome of Waking Shark II will influencefuture regulation.
"The more immediate result will be to affirm or call intoquestion the UK's position as a safe haven for investment and asa global leader in financial services," he said.
