Chapter 3: Cyber Risk: Growing Concern for Macro-Financial Stability
Cyber risks are increasing due to increasing digitalization, technological advances, and rising geopolitical tensions. Chapter 3 shows that while cyber incidents are not so far systemic, the risk of extreme losses from such incidents is increasing. The financial sector is highly exposed, and severe cyber incidents can lead to macro-financial disruption through loss of trust, disruption of critical services, and spillover to other institutions through technical and financial linkages. Potential stability risks. While corporate cyber legislation and cyber governance structures can help mitigate these risks, cyber policy frameworks remain generally inadequate, particularly in emerging market and developing countries. The financial sector's cyber resilience is therefore strengthened by developing appropriate national cybersecurity strategies, appropriate regulatory and supervisory frameworks, competent cybersecurity talent, and national and international information sharing arrangements. There is a need. Reporting of cyber incidents must be strengthened to enable more effective monitoring of cyber risks. Supervisors should hold board members accountable for managing cybersecurity in financial companies and promoting a positive risk culture, cyber hygiene, and cyber training and awareness. To limit potential disruption, financial companies should develop and test response and recovery procedures. National authorities need to develop effective response procedures and crisis management frameworks.
