How Countries Use War Games To Prevent Future Catastrophes

A group of Marines and Royal Thai Marines train during the 2011 Cobra Gold exercises.

Official U.S. Marine photo by Pfc. Mark W. Stroud

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A group of Marines and Royal Thai Marines train during the 2011 Cobra Gold exercises.

Since 9/11, many nations have taken it upon themselves to try out extreme scenarios to determine if their emergency teams are up to the task. By Kabir Chibber

On Oct. 13, the US and the UK will engage in a simulation of what would happen (paywall) if a large transatlantic bank went under. Treasury secretary Jack Lew, his British counterpart George Osborne and the heads of both central banks will take part.

In this scenario, the authorities in the US and UK are trying to “make sure we can handle an institution that was previously regarded as too big to fail” in the words of the British chancellor.

But this is merely the latest incarnation of the war game, which has a long history of building trust and co-operation among actors and nations that may dislike each other or don’t normally have to listen to anyone else.

Terror war games

In the wake of the September 11th attacks, many nations have taken it upon themselves to try out extreme scenarios to determine if their emergency teams are up to the task. In 2003, London simulated a chemical weapons attack on a subway below London’s financial district, including how they coped with decontamination and casualties. Sadly, the game was prescient—two years later, four suicide bombers attacked the London underground and bus systems, killing 52 people.

(Related: Simulating War Might Be the Best Way To Prevent One)

In Mar. 2014, the most powerful leaders in the world—including Barack Obama, Angela Merkel and Xi Jinping—played a war game in the Hague testing how they would cope with a terrorist nuclear attack. (Merkel didn’t want to play with experts at her side, apparently, but was strong-armed into it.) In the game, terrorists are planning to attack a Western city with a dirty bomb. The leaders had four choices on the tablet on what to do in real-time, with the results then presented at the end anonymously to the group. Happily, they managed to thwart the attack.

China and the US also engaged in cyber-war games through backdoor channels in 2011 and 2012 to prevent an escalation as more tit-for-tat hacker attacks continue between the two nations. During one exercise, both sides had to describe what they would do if their systems were attacked by a sophisticated virus. Another tested their reaction if a cyber-attack was launched from the other side.

Military war games

Military exercises have been going for centuries. But sometimes, countries team to test their ability to cope collectively with an outside threat. Most recently, many of these war games have involved China, which has been flexing its military muscles much more amid a territorial dispute in the East China Sea with Japan.

In July, China participated in its largest-ever naval exercises in the US-led ”Rim of the Pacific” around Hawaii, in more than 20 nations took part. The country participated in the humanitarian components and asked to operate under Australian command, which was seen as a huge breakthrough in military co-operation.

New alliances are also being formed. China and Russia also held their first naval war games in the Mediterranean in January as a precursor to military co-operation far way from both their territorial waters. The exercises involved Russia’s heavy nuclear missile cruiser, Peter the Great, and the Chinese frigate, Yancheng, in joint manoeuvring in which helicopters of the two warships practiced landing on each other’s decks.

Not that the rest of the world is being left out. NATO will stage a 40,000-troop war game in 2015 in Spain and Portugal.

Financial war games

The financial crash game on Oct. 13 will test how both sides would respond if a large UK lender with US operations and a US bank with British holdings went under. As with many of these exercises, it is not just about testing how one copes with stress but looking at how both sides operate. “It is an opportunity to make sure our different, but similar, domestic arrangements work,” Osborne told the FT.

But enacting a war game doesn’t mean that you necessarily learn everything you need to learn. In 2004, the Bank of England and the Financial Services Authority, which was then the UK’s banking regulator, engaged in the first of a series of war games (paywall) to deal with the collapse of a large financial institution.

One case imagined a European court decision that changed the legal basis on which banks held their property assets, leading to short-term funding to that bank drying up. But what the war games taught the financial authorities was how quickly such problems could spread from one small bank to other larger ones.

Still, despite testing this in real life, the British authorities were not able to deal with the crisis that occurred in 2008 to Northern Rock, when the fallout from the subprime crisis in the US led to banks around the world being reluctant to lend to each other. The UK’s fifth-largest lender was bailed out by the state. Perhaps this new game will mean next time is different.

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