Market watchdog warns on danger of cyber attack 

A global watchdog has sounded the alarm about the growing danger of cyber attacks, on financial markets, warning that firms and regulators around the world need to address the “uneven” response to the threat of online assaults.

Greg Medcraft, chairman of the board of the International Organisation of Securities Commissions (Iosco), predicted that the next major financial shock – or “black swan event” – will come from cyber space, following a succession of attacks on financial players.

Regulators are looking at producing a global “toolbox” next year to assess whether firms are sufficiently robust and managing their risks adequately.

“The issue of cyber resilience is a bit of a sleeper issue, and one that we have to be proactive [about] in terms of making sure the risk management approach is robust,” Mr Medcraft said in an interview with the Financial Times. “Cyber crime has a huge potential impact on markets.”

The US Securities and Exchange Commission in April said it would examine the cyber resilience of more than 50 broker-dealers and investment advisers. The focus is on firms including broker dealers, fund managers, companies listed on stock markets and the stock markets themselves.

Iosco, an umbrella body whose members include more than 120 securities regulators, has been highlighting cyber risks after last year releasing a report showing that more than half of securities exchanges had been on the receiving end of an attack.

In Britain, the Bank of England has been overseeing a programme of “ethical hacking” aimed at assessing the ability of leading players including banks and insurers to fend off cyber assaults.

 

Source: FT

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