TERROR: Targeting Banks

TERROR: Targeting Banks

February 17, 2005 12:29 pm (EST)

Current political and economic issues succinctly explained.

More on:

Terrorism and Counterterrorism

This publication is now archived.

Why are banks and other financial institutions tempting terror targets?

Experts say terrorist groups like al Qaeda seek to deliver a major economic shock to the United States by disrupting the nation’s financial network. Their "goal is to attack the economic basis of our power," says Stephen E. Flynn, the Jeane J. Kirkpatrick senior fellow for national security studies at the Council on Foreign Relations and author of "America the Vulnerable." "Since they cannot confront us with military power, our enemies are compelled to look for our vulnerabilities. And our critical infrastructure is one of the most vulnerable aspects of our power." After 9/11, Qaeda leader Osama bin Laden spoke approvingly of the economic havoc those attacks caused.

Which sites are considered targets?

On August 1, Secretary of Homeland Security Tom Ridge named five institutions that recent intelligence identified as potential targets for truck bombs: the New York Stock Exchange, which has more than 3,000 employees; Citigroup Center, the Manhattan headquarters of financial services giant Citigroup, which has more than 25,000 employees in the city; Prudential Plaza in Newark, N.J., headquarters of Prudential Financial Inc., with about 2,800 employees; the World Bank Group, which has some 7,000 employees in Washington, D.C.; and the International Monetary Fund (IMF), which has some 3,000 employees in Washington.

Why these sites?

Experts say al Qaeda prefers symbolic targets; the stock exchange and the two large financial firms are obvious symbols of Western financial might. David Braunchsvig, managing director at Lazard Freres and the Bernard L. Schwartz senior fellow at the Council on Foreign Relations, says that terrorists may be trying to tap grassroots antagonism toward transnational institutions by going after the IMF and World Bank. "There is capital of sympathy--in the Third World, Europe, and around the world--that terrorists can draw on by targeting these organizations," Braunschvig says.

Have terrorists hit economic targets in the past?

Yes. Qaeda operatives attacked New York’s World Trade Center twice, in 1993 and 2001. Other attacks include:

  • Bali, October 2002: In an assault that crushed Indonesia’s tourism industry, bombs in a district popular among foreign vacationers killed more than 200 people.
  • Istanbul, November 2003: The Turkish headquarters of London-based international bank HSBC and the British consulate were hit by coordinated suicide truck bombings that killed 62.
  • Recent attacks in Saudi Arabia, including kidnappings and killings of foreign workers, are intended to disrupt Saudi Arabia’s oil supply and cause upheaval in world oil markets, experts say.

What security measures have been put in place as a result of the current warnings?

At many of the at-risk sites, surrounding streets have been closed to traffic and are guarded by armed police officers. Concrete barricades have been erected to keep cars and trucks at a distance. Entrances to some buildings have been closed; those remaining open are heavily guarded. In New York, commercial vehicles have been banned indefinitely from entering the city on some bridges and tunnels, and police are conducting random searches of cars and trucks. In New Jersey, 1,000 state investigators are working to prevent attacks, and antiterrorism squads have been deployed to inspect trucks, commuter trains, and ferries. Two teams of bomb-sniffing dogs are patrolling the World Bank. In Washington, D.C., firehouses have restricted public access and firefighters’ leave has been cancelled.

Aside from specific precautions, are financial institutions prepared for an attack?

Terror expert Flynn says the financial sector and other industries have made preparations since the devastation of 9/11, "but is the system secure? No. It’s better than it was, but there’s a long way to go." Flynn calls for building "redundancy" into commercial networks and systems, so that additional capacity exists in the event of an emergency. "It’s like a backup generator," he says. "If one part is taken out, another part can kick in and take over. We also need continuity of operations, so everyone knows what to do in case of attack."

What other institutions may be at risk?

Experts say other financial institutions--including the U.S. Federal Reserve banks, stock exchanges around the world, and large banks in Britain and Switzerland--have been threatened. In addition, experts say landmarks like Capitol Hill or the White House are at risk of being targeted by various types of attacks (car bombs, missiles, and anthrax, for example). Bridges and tunnels, major subway stations, and train and bus terminals are also considered vulnerable. Experts also caution police and other authorities to be on the lookout for attacks that would spread biological or chemical agents through building ventilation systems, heaters, or air conditioners.

Are heightened terror warnings effective?

Experts disagree. Some officials say it’s important for people to know what the authorities do in order to boost personal vigilance against potential attacks. Other experts say the alerts--which have been repeatedly raised and lowered--increase fear and anxiety. "My sense is that there’s a base level of awareness [of risk] that exists, and then the individual indications by federal and local authorities serve to crystallize this awareness for a period of time. It lasts for a few days. After that, people resume their ordinary lives," Braunschvig says.

Will warnings deter attacks on the recently named financial targets?

Perhaps, some experts say. But Qaeda operatives always have back-up plans. "Our challenge is that we don’t know ... whether they’re scoping out other targets," Flynn says. Braunchsvig says that al Qaeda may be considering an attack on New York institutions as a show of force. "With all the security there is now, if [terrorists] managed to hit a target, it would be a major achievement," he says.

What can be done to reduce the risk of attacks?

"The government needs to be more candid about our real vulnerabilities," Flynn says, "but the conversation needs to be ongoing, and when it’s not constant, sudden warnings and contrasting messages are very disconcerting. When we hear, ’Keep shopping and traveling,’ and then, ’We have specific intelligence about imminent attack,’ they’re different story lines," he says. "The American people and the private sector are not prepared to deal with these threats, because there’s no overall game plan from the government."

More on:

Terrorism and Counterterrorism


Top Stories on CFR

World Trade Organization (WTO)

WTO members confounded expectations last week by concluding a deal on fisheries subsidies, the first major multilateral agreement in nearly a decade. But the trade body is not out of the woods yet.

Saudi Arabia

The United States and Saudi Arabia both stand to benefit by renewing their central strategic partnership, argue Steven A. Cook and Martin S. Indyk.


David Sacks, research fellow at CFR, sits down with James M. Lindsay to discuss the Biden administration’s strategy toward Taiwan amid growing threats from China.