Cyber Risk, Market Failures, and Financial Stability

Cyber Risk, Market Failures, and Financial Stability
Author: Emanuel Kopp
Publisher: International Monetary Fund
Total Pages: 36
Release: 2017-08-07
Genre: Computers
ISBN: 1484314131

Download Cyber Risk, Market Failures, and Financial Stability Book in PDF, Epub and Kindle

Cyber-attacks on financial institutions and financial market infrastructures are becoming more common and more sophisticated. Risk awareness has been increasing, firms actively manage cyber risk and invest in cybersecurity, and to some extent transfer and pool their risks through cyber liability insurance policies. This paper considers the properties of cyber risk, discusses why the private market can fail to provide the socially optimal level of cybersecurity, and explore how systemic cyber risk interacts with other financial stability risks. Furthermore, this study examines the current regulatory frameworks and supervisory approaches, and identifies information asymmetries and other inefficiencies that hamper the detection and management of systemic cyber risk. The paper concludes discussing policy measures that can increase the resilience of the financial system to systemic cyber risk.

Systemic Cyber Risk and Aggregate Impacts

Systemic Cyber Risk and Aggregate Impacts
Author: Jonathan William Welburn
Publisher:
Total Pages: 22
Release: 2019
Genre: Computer crimes
ISBN:

Download Systemic Cyber Risk and Aggregate Impacts Book in PDF, Epub and Kindle

With some of the largest cyber-attacks occurring in recent years - from 2010 to 2019 - we are only beginning to understand the full extent of cyber risk. As businesses grapple with the risks of cyber-incidents and their imperfect ability to prevent them, attention has shifted towards risk management and insurance. While there have been efforts to understand the costs of cyber-attacks, the systemic risk - a result of risks spreading across interdependent systems - associated with cyber-attacks remains a critical and problem in need of further study. We contribute a theoretical framework that describes systemic cyber risk as the result of cascading, common cause, or independent failures following a cyber incident. We construct a quantitative model of cascading failures to estimate the potential economic damage associated with a given cyber incident. We present an interdisciplinary approach for extending standard sector-level input-output analyses to the cyber domain, which has not been done. We estimate the aggregate losses associated with firm-level incidents, a contribution to risk analysis and computational economic modeling. We use this model to estimate the impact of potential cyber incidents and compare model results to a case with known damages. Finally, we use the model of systemic cyber risk to consider the implications on the growing cyber insurance market and the need for broader cyber policy.

Mitigating Systemic Cyber Risk

Mitigating Systemic Cyber Risk
Author: Borut Poljšak
Publisher:
Total Pages: 46
Release: 2022
Genre:
ISBN: 9789294722546

Download Mitigating Systemic Cyber Risk Book in PDF, Epub and Kindle

Financial Cybersecurity Risk Management

Financial Cybersecurity Risk Management
Author: Paul Rohmeyer
Publisher: Apress
Total Pages: 276
Release: 2018-12-13
Genre: Computers
ISBN: 1484241940

Download Financial Cybersecurity Risk Management Book in PDF, Epub and Kindle

Understand critical cybersecurity and risk perspectives, insights, and tools for the leaders of complex financial systems and markets. This book offers guidance for decision makers and helps establish a framework for communication between cyber leaders and front-line professionals. Information is provided to help in the analysis of cyber challenges and choosing between risk treatment options. Financial cybersecurity is a complex, systemic risk challenge that includes technological and operational elements. The interconnectedness of financial systems and markets creates dynamic, high-risk environments where organizational security is greatly impacted by the level of security effectiveness of partners, counterparties, and other external organizations. The result is a high-risk environment with a growing need for cooperation between enterprises that are otherwise direct competitors. There is a new normal of continuous attack pressures that produce unprecedented enterprise threats that must be met with an array of countermeasures. Financial Cybersecurity Risk Management explores a range of cybersecurity topics impacting financial enterprises. This includes the threat and vulnerability landscape confronting the financial sector, risk assessment practices and methodologies, and cybersecurity data analytics. Governance perspectives, including executive and board considerations, are analyzed as are the appropriate control measures and executive risk reporting. What You’ll Learn Analyze the threat and vulnerability landscape confronting the financial sector Implement effective technology risk assessment practices and methodologies Craft strategies to treat observed risks in financial systemsImprove the effectiveness of enterprise cybersecurity capabilities Evaluate critical aspects of cybersecurity governance, including executive and board oversight Identify significant cybersecurity operational challenges Consider the impact of the cybersecurity mission across the enterpriseLeverage cybersecurity regulatory and industry standards to help manage financial services risksUse cybersecurity scenarios to measure systemic risks in financial systems environmentsApply key experiences from actual cybersecurity events to develop more robust cybersecurity architectures Who This Book Is For Decision makers, cyber leaders, and front-line professionals, including: chief risk officers, operational risk officers, chief information security officers, chief security officers, chief information officers, enterprise risk managers, cybersecurity operations directors, technology and cybersecurity risk analysts, cybersecurity architects and engineers, and compliance officers

Systemic Cyber Risk

Systemic Cyber Risk
Author:
Publisher:
Total Pages:
Release: 2020
Genre:
ISBN: 9789294721310

Download Systemic Cyber Risk Book in PDF, Epub and Kindle

During recent decades, the global financial system has become more digitalised and interconnected. For its functioning, the real economy requires the financial system to perform a range of key economic functions reliably. These include payment services, securities trading, settlement services and deposit taking, among others. These processes have become increasingly digitalised, creating new and important interdependencies. Hence, the financial system has come to rely critically on robust information and communications technology (ICT) infrastructures and the confidentiality, integrity and availability of data and systems. It follows that key economic functions can be disrupted through cyber incidents that affect the information systems and data of financial institutions and financial market infrastructures. Understanding the impact of such disruptions on financial stability is the focus of this report. Cyber risk is characterised by three key features that, when combined, fundamentally differentiate it from other sources of operational risk: the speed and scale of its propagation as well as the potential intent of threat actors. The interconnectedness of various information systems enables cyber incidents to spread quickly and widely. Some recent incidents have demonstrated actors' ability to penetrate the networks of large organisations and incapacitate them quickly. Cyber incidents can also spread widely across sectors and beyond geographical borders, including to entities which are not the primary target or source of disruption. Malicious cyber incidents are becoming more persistent and prevalent, illustrating the high level of sophistication and coordination that threat actors are able to achieve. The ESRB has developed an analytical framework to assess how cyber risk can become a source of systemic risk to the financial system. The four stages of this conceptual model (context, shock, amplification, systemic event) facilitate a systematic analysis of how a cyber incident can grow from operational disruption into a systemic crisis. In particular, the framework could assist in analysing systemic vulnerabilities that amplify the shock of a cyber incident, and in understanding at which point a cyber incident may become systemic. The ESRB also surveyed its membership to form a view on common individual vulnerabilities across ESRB jurisdictions. Combining these elements, the ESRB has considered a number of historical and hypothetical scenarios. It used these scenarios to try to understand the distinction between severe operational disruption to the financial system, on the one hand, and a systemic crisis, on the other hand.

Identifying and Prioritizing Systemically Important Entities

Identifying and Prioritizing Systemically Important Entities
Author: John Bordeaux
Publisher:
Total Pages: 0
Release: 2023-11-20
Genre: Business & Economics
ISBN: 9781977409843

Download Identifying and Prioritizing Systemically Important Entities Book in PDF, Epub and Kindle

This report helps the Cybersecurity and Infrastructure Security Agency codify the concept of systemically important critical infrastructure by documenting the work surrounding systemic risks and cyber risks in software supply chains.

Cyber Risk Scenarios, the Financial System, and Systemic Risk Assessment

Cyber Risk Scenarios, the Financial System, and Systemic Risk Assessment
Author: Lincoln Kaffenberger
Publisher:
Total Pages: 25
Release: 2019
Genre: Economic policy
ISBN:

Download Cyber Risk Scenarios, the Financial System, and Systemic Risk Assessment Book in PDF, Epub and Kindle

Cyber risk has become a key issue for stakeholders in the financial system. But its properties are still not precisely characterized and well understood. To help develop a better understanding, we discuss the properties of cyber risk and categorize various cyber risk scenarios. Furthermore, we present a conceptual framework for assessing systemic cyber risk to individual countries. This involves analyzing cyber risk exposures, assessing cybersecurity and preparedness capabilities, and identifying buffers available to absorb cyber risk–induced shocks.

Systemic Cyber Risk

Systemic Cyber Risk
Author: David Forscey
Publisher:
Total Pages: 27
Release: 2022
Genre: Computer crimes
ISBN:

Download Systemic Cyber Risk Book in PDF, Epub and Kindle

This paper seeks to provide a common foundation for understanding and addressing systemic cyber risk. Building on prior research, it explores definitions of the problem, underlying contributing factors, and potential policy responses. Although much remains unknown about systemic cyber risk, including its true size and distribution, public and private sector leaders worldwide can and should act now to investigate, reduce, and manage the risk.

Cyber Risk for the Financial Sector: A Framework for Quantitative Assessment

Cyber Risk for the Financial Sector: A Framework for Quantitative Assessment
Author: Antoine Bouveret
Publisher: International Monetary Fund
Total Pages: 29
Release: 2018-06-22
Genre: Computers
ISBN: 1484360753

Download Cyber Risk for the Financial Sector: A Framework for Quantitative Assessment Book in PDF, Epub and Kindle

Cyber risk has emerged as a key threat to financial stability, following recent attacks on financial institutions. This paper presents a novel documentation of cyber risk around the world for financial institutions by analyzing the different types of cyber incidents (data breaches, fraud and business disruption) and identifying patterns using a variety of datasets. The other novel contribution that is outlined is a quantitative framework to assess cyber risk for the financial sector. The framework draws on a standard VaR type framework used to assess various types of stability risk and can be easily applied at the individual country level. The framework is applied in this paper to the available cross-country data and yields illustrative aggregated losses for the financial sector in the sample across a variety of scenarios ranging from 10 to 30 percent of net income.

Solving Cyber Risk

Solving Cyber Risk
Author: Andrew Coburn
Publisher: John Wiley & Sons
Total Pages: 384
Release: 2018-12-12
Genre: Business & Economics
ISBN: 111949091X

Download Solving Cyber Risk Book in PDF, Epub and Kindle

The non-technical handbook for cyber security risk management Solving Cyber Risk distills a decade of research into a practical framework for cyber security. Blending statistical data and cost information with research into the culture, psychology, and business models of the hacker community, this book provides business executives, policy-makers, and individuals with a deeper understanding of existing future threats, and an action plan for safeguarding their organizations. Key Risk Indicators reveal vulnerabilities based on organization type, IT infrastructure and existing security measures, while expert discussion from leading cyber risk specialists details practical, real-world methods of risk reduction and mitigation. By the nature of the business, your organization’s customer database is packed with highly sensitive information that is essentially hacker-bait, and even a minor flaw in security protocol could spell disaster. This book takes you deep into the cyber threat landscape to show you how to keep your data secure. Understand who is carrying out cyber-attacks, and why Identify your organization’s risk of attack and vulnerability to damage Learn the most cost-effective risk reduction measures Adopt a new cyber risk assessment and quantification framework based on techniques used by the insurance industry By applying risk management principles to cyber security, non-technical leadership gains a greater understanding of the types of threat, level of threat, and level of investment needed to fortify the organization against attack. Just because you have not been hit does not mean your data is safe, and hackers rely on their targets’ complacence to help maximize their haul. Solving Cyber Risk gives you a concrete action plan for implementing top-notch preventative measures before you’re forced to implement damage control.