Cyber incident could trigger next financial crisis, warns Cœuré

Benoît Cœuré, who also chairs the Committee on Payments and Market Infrastructures of the Bank for International Settlements (BIS), said a "failure to adequately protect against cyber attacks may have far-reaching repercussions".

In a speech in Basel last week, Cœuré highlighted the "interdependencies" of central clearing systems throughout the world. He said "a default, or an operational outage, of a key node in the network can have significant consequences" across a number of central counterparties.

A cyber incident simulation involving G7 finance ministers and central bank governors earlier this year "showed that a major cyber-incident would require an internationally coordinated response", Cœuré said. A further "cross-border cyber-crisis simulation exercise involving G7 financial authorities" is planned, but there are barriers to a global coordinated response to a major cyber incident, he said.

"Sharing of information, also across borders, is … essential in fending off cyber-attacks," Cœuré said. "But impediments, related to privacy, data protection or reputational concerns, abound. So, we need some structured thinking about how to overcome these impediments with a view to strengthening cyber-resilience."

Cœuré said that the cyber risk facing the financial system is exacerbated by "digitisation".

"Digitalisation is the breeding ground for cyber-threats," he said. "Despite its undisputable benefits, digitalisation brought many ills, such as hacking, phishing or identity theft, and in general it is an enabler of new forms of fraud. And the stakes have risen. Hackers increasingly target wholesale payment systems and the large money flows they handle."

"Strengthening cyber-resilience, especially in payments, must therefore be part of any policy agenda," he said.