Cyber attacks could be the next “black swan” event to cause chaos in the financial markets, according to the International Organisation of Securities Commissions (IOSCO).
In an interview with the Financial Times, Greg Medcraft, Chairman of the global watchdog, warned that “cyber crime has a huge potential impact on markets” but that, so far, responses by firms and regulators around the world have been “uneven.”
“The feedback we have had from industry in discussions is that there is not a consistency in approach,” he said.
A number of major corporations and financial organisations have been hit by hackers in recent months, with the Heartbleed scare exposing half a million websites to information theft – including credit card information and passwords. To help battle these, Iosco proposes a “global toolbox” that can be used by companies to identify vulnerabilities as early as possible. This would create a more consistent response to the attack, without which, says Medcraft, organisations and markets are weakened.
“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,” said Medcraft.
The move has been well received by industry figures. “Financial markets are globally interconnected and dependent and the financial system is only as strong as its weakest link,” said Richard Richard Horne, cyber security partner at PwC. “As things stand the regulatory approach around the world is very patchy, so we need more co-ordination and consistency. Iosco’s move on this is a welcome step forward.”
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