According to the financial regulator, a flu pandemic would seriously affect the distribution of cash through banks' retail branches, and wholesale markets would see reduced trading volumes as firms attempt to deal with staff shortages.
The labor intensive areas of banking such as retail banking would suffer the most, the FSA found, leading to branch closures and serious bottlenecks in flow and distribution of cash.
The findings came as the result of a six-week trial jointly conducted by the FSA, the Treasury and the Bank of England, modeling how financial markets and services would respond to mass staff absences during a flu outbreak.
"The distinguishing feature of a pandemic is that its main impact is upon the availability of personnel rather than on physical assets," the FSA's report said.
"The scenario set the distribution of cash across the country as an early challenge for the industry and the authorities to respond to. Although no overall cash shortage emerged during the exercise, there were bottlenecks."
However, the findings also showed that the financial markets could be kept open despite the shortage of personnel.