BIS Bulletin Examines Key Elements of Policy Response to Cyber Risk
BIS published a bulletin, or a note, that examines the cyber threat landscape in the context of the pandemic and discusses policies to reduce risks to financial stability. The financial sector has been hit relatively more often by cyber-attacks than most other sectors since the pandemic started. Payment firms, insurers, and credit unions have been especially affected. While this has not yet led to significant disruptions or a systemic impact, substantial cyber risks exist for financial institutions, their staff, and their customers going forward. Financial authorities are working to mitigate cyber risks, including through international cooperation.
The BIS Bulletin emphasizes that policy must consider two near-term trends. First, remote work is likely to remain higher than in the pre-COVID-19 period. Second, financial institutions are likely to continue to move parts of their IT operations to public cloud environments. As the market for cloud services is highly concentrated, there are warnings about increased homogeneity in the financial sector and single points of failure. A recent survey indicates that 82% of companies increased cloud usage as a result of the COVID-19 pandemic and 91% are planning a more strategic use of cloud in the near future. Through shared software, hardware, and vendors, incidents could, in principle, spread more quickly, leading to higher losses for financial institutions and stress in the financial system.
Policymakers and businesses are actively working together to mitigate cyber risks and their systemic implications. For instance, many private- and public-sector organizations are strengthening their operational resilience and many have engaged in “war games” or simulations of cyber-attacks. These exercises can help to identify vulnerabilities and enhance preparedness and lines of communication. Moreover, financial supervisors and overseers are leveraging national or international standards and guidance to promote cyber resilience. In addition to the global initiatives, several regional groups and cooperation forums are also working to address this challenge.
Related Links
Keywords: International, Banking, Insurance, Securities, COVID-19, Cyber Risk, Systemic Risk, Cloud Computing, BIS
Featured Experts
Victor Calanog, Ph.D.
Leading economist; commercial real estate; performance forecasting, econometric infrastructure; data modeling; credit risk modeling; portfolio assessment; custom commercial real estate analysis; thought leader.
Previous Article
Central Bank of Ireland Consults on Treatment of Discretions in IFRNext Article
CBM Amends Directive on Loan Moratoria Amid PandemicRelated Articles
EBA Updates Filing Rules for Supervisory Reporting
The European Banking Authority (EBA) published version 5.1 of the filing rules for supervisory reporting.
ECB Amends Guideline on Procedures for Collection of AnaCredit Data
The European Central Bank (ECB) Guideline 2021/1829 on the procedures for the collection of granular credit and credit risk data has been published in the Official Journal of European Union.
ECB Amends Guideline on Procedures for Collection of AnaCredit Data
The European Central Bank (ECB) Guideline 2021/1829 on the procedures for the collection of granular credit and credit risk data has been published in the Official Journal of European Union.
EBA Publishes Standards on Disclosure of Investment Policy Under IFR
The European Banking Authority (EBA) published the final draft regulatory technical standards on disclosure of investment policy by investment firms, under the Investment Firms Regulation (IFR).
APRA Finalizes Guidance for New Prudential Standard on Remuneration
The Australian Prudential Regulation Authority (APRA) published the prudential practice guide CPG 511 to assist banks, insurers, and superannuation licensees in meeting requirements of CPS 511, the new prudential standard on remuneration.
OCC Updated LIBOR Self-Assessment Tool for Banks
The Office of the Comptroller of the Currency (OCC) published a bulletin that provides an updated self-assessment tool for banks to evaluate their preparedness for cessation of the London Interbank Offered Rate (LIBOR).
TCFD Updates Guidance for Financial Disclosures on Climate Risk
The Financial Stability Board (FSB) published a report that examines the progress made toward disclosures aligned with recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).
BCBS Report Examines Progress on Adoption of Basel III Framework
The Basel Committee on Banking Supervision (BCBS) published the progress report on adoption of the Basel III regulatory framework in member jurisdictions.
ACPR Implements Updates Related to DPM Version 3.1
The French Prudential Supervisory Authority (ACPR) has implemented, in its information system, updates linked to the Data Point Model (DPM) version 3.1.
EBA Note Examines Transition Risks of Benchmark Rates
The European Banking Authority (EBA) published a thematic note that aims to identify and raise awareness of the transition risks of benchmark rates, as the London Interbank Offered Rate (LIBOR) and the Euro Overnight Index Average (EONIA) are close to being phased out.
