* Banks prepare in case London is put into lockdown
* Banks say some traders would get 'key worker' designation
* Regulator eases position on remote trading
* Global exchanges say to stay open during crisis
By Sinead Cruise and Lawrence White
LONDON, March 19 (Reuters) - London-based banks plan to keep trading floors open even in the event of a formal lockdown of the British capital, betting that their frontline staff will be treated by authorities as "key workers".
Five global banks told Reuters they currently had no plans to disband trading and market-making teams working in London's two main financial districts of the 'Square Mile' and Canary Wharf as well as in suburban backup sites, although they were equipping traders to cope with a sudden change in circumstances.
Four said they understood financial sector market makers would be defined as 'key workers' alongside healthcare professionals and police, meaning some traders would be granted special permissions to travel to work and keep markets open in the event of a city-wide shutdown.
"There's no real impact on the traders in our three locations," one of the sources said, adding that there were no plans for a total closure of trading floors.
"When [trading teams] were split, we took into account where they lived anyway, and where necessary we have put them up in hotels. There are just a handful working from home, but we can up that number if necessary and the regulator allows."
Credit Suisse on Thursday offered an early warning sign of the potential disruption that new working arrangements could cause, after it said access to its company network was briefly limited for employees working remotely.
A second British bank told Reuters it was now in "full-time planning mode" on how to manage the situation but efforts had been hampered by the Financial Conduct Authority (FCA), who had so far resisted calls to loosen rules governing remote trading, in line with its peers in the United States.
The FCA on Tuesday did ease its position on trading from home but without giving much detail on concrete measures.
It said banks should still take all reasonable steps to meet their regulatory obligations when trading from back up sites, such as continuing to record calls even if trading from home.
“But we accept that some scenarios may emerge where this is not possible,” the FCA said.
“We expect firms to consider what steps they could take to mitigate outstanding risks if they are unable to comply with their obligations to record voice communications. This could include enhanced monitoring, or retrospective review once the situation has been resolved,” the FCA said.
Bankers said there was not enough clarity on what is and is not permitted for traders working from home.
"The FCA just keeps repeating its rules and saying everyone must remain compliant. Banks can replicate everything in terms of recorded lines, controls except for the management oversight piece," the source said, pointing to one of the biggest obstacles to trading remotely.
Reporting by Sinead Cruise and Lawrence White, additional reporting by Huw Jones, Clara Denina and Saeed Azhar; Editing by Alexander Smith