Both the financial services industry and corporations everywhere have faced an increase in cyberattacks in recent years, by both state-led and individual actors. This report focuses on how an attack could occur in collateral markets that could destabilize a range of bilateral industries, including OTC derivatives, repo and securities lending.
Both the financial services industry and corporations everywhere have faced an increase in cyberattacks in recent years, by both state-led and individual actors. Hacking has become a substantial concern, and companies have built up their resources and expertise to combat it. Even so, major hacks continue to occur with thefts of intellectual property, private consumer information and emails that can be published online to end careers, political campaigns and more.
Financial services market participants have engaged in substantial work at individual firms, industry associations and regulatory agents to protect against a general cybersecurity attack. These efforts have led to important lessons in communication, coordination and the requirement to restart operations within two hours to ensure public confidence. A successful attack would begin with one institution, but system-wide doubt in collateral regimes could create a crisis-like situation if not promptly resolved.
This report provide critical thinking about points in the system where a malicious actor could cause damage and what can be done in the event of a serious incursion, following on the model of SIFMA’s Quantum Dawn exercises. We offer several scenarios that could impact the market.
This report is useful reading for technology professionals in the collateral space, cybersecurity professionals in financial services and regulators concerned about the security of the financial industry.
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