Interconnectedness of banking system at risk of cyberattack

The Federal Reserve Bank of New York’s Staff Report No. 909 explores how a cyberattack on several small or midsize banks could create an interbank funding failure. Such a failure would lead to a broader systemic liquidity crisis. Putting cybersecurity tools and policies in place at individual banks would not address the interconnectedness of the entire banking ecosystem. However, employing a thorough modeling approach that takes into account the potential points of cascading failures would help decision makers understand the interconnectedness of their risks, as Milliman’s Chris Harner, Chris Beck, and Blake Fleisher discuss in their article “Cyberattacks could cripple U.S. financial system.”

Leave a Reply

Your email address will not be published. Required fields are marked *