While the financial system experienced no major breakdowns as a result of the events of September 11, the attacks exposed significant deficiencies, says the McKinsey document. It points to a lack of geographic diversity in contingency plans, insufficient access to back-up sites, a lack of alternative networks and systems for telecommunications and power, and a vulnerability to key choke points.

"The weaknesses could pose a significant threat in the event of future system-wide disruptions," says the report.

It recommends that the financial services industry, with oversight and support from regulators, acts to reduce the exposure of market participants to systemic vulnerabilities. Regulatory oversight of individual institutions, and the linkages among them, should provide guidance on alleviating operational risks, states McKinsey. At market level, the report recommends greater oversight of the commercial paper and repo markets to avert the possibilities of large-scale defaults.

At the same time, the industry should develop an "alternative communications network" for use in emergency situations and should work collaboratively with the utilities to make the infrastructure as resilient as possible.

The analysis is part of a larger cross-sector report from the New York City Partnership analysing the impact of the attacks on the city's economy. It states that forty percent, or 1700, of the civilians killed in the assault on the World Trade Centre worked in the financial services industry.

Of the thousands of jobs that have temporarily left the city, many may never come back, believes McKinsey, as companies place operations in multiple locations to achieve higher levels of security and to position themselves to activate alternative systems in the event of future disasters.