Written by: Carter Jack Lewis. This is the third part of our series on what would happen in North America if the power were to go out and never come back on. Click here for part 1. Click here for part 2.
In the case of a catastrophic EMP event the economic landscape would be severely impacted, affecting multiple facets of the banking and financial industries. Here’s a detailed look at how this scenario might unfold:
Access to Savings and Checking Accounts:
Impact: Online and mobile banking, integral to modern financial interactions, would likely become inaccessible. Individuals would struggle to access their savings and checking accounts, conduct transactions, or monitor their financial affairs.
ATMs (Automated Teller Machines):
Impact: The widespread reliance on electronic systems for ATM transactions means that many ATMs could become nonfunctional. This would result in limited access to physical cash, posing a challenge to individuals who depend on these machines for everyday financial needs.
Credit Cards and Debit Cards:
Impact: Credit and debit card transactions depend on electronic payment processing systems, which would be susceptible to EMP-related disruptions. This would render card-based transactions impossible, forcing people to seek alternative payment methods.
Impact: The supply of cash from banks and ATMs could be significantly constrained. Individuals may find it difficult to obtain physical currency, potentially leading to a shortage of cash for day-to-day transactions.
Impact: Electronic trading platforms and investment accounts would be unreachable. Stock market operations, as well as the management and monitoring of investment portfolios, could come to a standstill, causing uncertainty in financial markets.
Impact: Stock exchanges and trading platforms, being heavily reliant on electronic systems, would face disruptions. Trading in stocks would be impaired, making it impossible to buy or sell equities, potentially impacting individual and institutional investors.
Impact: Electronic bill payments, funds transfers, and financial transactions would be hindered, complicating the process of settling financial obligations, from utility bills to mortgage payments.
In conclusion, the North American banking and financial industries would, in a worst-case EMP scenario, be largely decimated and rendered inoperable. This would be characterized by:
Cash Dependency: People would need to rely on the physical cash or valuables they possess, emphasizing the importance of cash for daily transactions. A barter economy could develop, with valuable goods becoming a form of new currency as salt did for many communities during the Liberian and Sierra Leonean civil wars.
Payment Challenges: Credit and debit cards would lose their functionality, necessitating a return to cash-based transactions.
Hurdles to Financial Access: Online banking would be largely inaccessible, resulting in challenges accessing and managing savings and checking accounts.
Market Turmoil: Stock markets would experience at best a standstill, with uncertainty prevailing in investment and trading activities. The global economy would take an unprecedented hit.
Difficulty Paying Bills: Managing financial obligations, including paying bills, would become increasingly complicated for individuals and businesses.
The extent of this disruption would vary based on the EMP’s severity and the resilience of affected systems. In response to such a scenario, emergency measures and comprehensive financial contingency plans would be indispensable to ensure economic stability, recovery, and adaptability in a completely altered financial landscape. This truly would be an unprecedented and in many ways unfathomable disruption to the way North America operates as an international hub for finance, banking and technological innovation.