The Institute of International Finance (IIF) was delighted to host the launch of Chapter 3 of the International Monetary Fund (IMF) April 2024 Global Financial Stability Report, which assesses the potential financial stability implications of cyber risks and discusses policy options to mitigate such risks. The event took place in Washington, D.C. on Tuesday, April 9.

The chapter presents a simple conceptual framework on the potential channels through which cyber risks can disrupt macrofinancial stability. It also empirically examines three key questions. First, how large are firm-level losses from cyber incidents? Second, what factors explain the occurrence of cyber incidents? Third, how vulnerable is the financial sector to cyber risk? The report finds that while cyber incidents have thus far not been systemic, the probability of severe cyber incidents has increased, posing an acute threat to macrofinancial stability. Because private incentives to address cyber risks may differ from the socially optimal level of cybersecurity, public intervention may be necessary. Through a survey, the chapter offers insights into the preparedness of central banks, financial regulators, and financial supervisors, particularly in emerging market and developing economies. Finally, the chapter discusses policy options to strengthen the resilience of the financial system to systemic cyber risks.

Featured Speakers:
Martin Boer, Senior Director, Regulatory Affairs, IIF
Clay Lowery, Executive Vice President, Research and Policy, IIF
+ Fabio Natalucci, Deputy Director, Monetary and Capital Markets Department, IMF
Felix Suntheim, Deputy Division Chief, IMF

This session was moderated by Melanie Idler, Associate Policy Advisor, Regulatory Affairs, IIF.

Please contact [email protected] with any questions.