Lunch seminar with Jason Healey

SPEAKER : 

Jason Healey (Columbia University)

"The Future of Financial Stability and Cyber Risk"

Cyber risks pose unique threats to financial stability that are not well understood or managed, despite growing investment in research and dependence by financial institutions, consumers, and governments on cyber technologies. This paper considers the ways in which cyber risks differ from traditional financial shocks. In contrast to the financial and policy shocks that have triggered past financial panics, cyber attacks are generally designed and initiated by sentient adversaries in aggressive pursuit of specific malicious goals. If one of those goals is broad financial system instability, a cyber attack may pose unique challenges. Unfortunately, the interactions between the financial contagion channels and the technological and operational risk channels of cyber attacks have not been examined carefully. For example, a sustained attack on a large global financial institution could be contagious across both dimensions, but where and how the contagion channels might feed on each other and accelerate risk is an important area for future work. This paper starts by examining traditional risks to financial stability, such as contagion from excessive leverage. It also examines the current regulatory frameworks and partnerships, both domestic and international, established to increase the resilience of the financial system to cyber risk. The analysis concludes with major concerns and potential gaps in understanding and mitigating cyber risks to financial stability.

Please note that lunch will be provided upon registration only.