A recent report by the Office of Financial Research indicates the financial system is stable and resilient but highlighted some emerging threats. Specifically, the report highlights elevated market risk and increased risks of cybersecurity incidents.
The report specifically highlights (3) primary vulnerabilities as follows:
“First, cybersecurity incidents have become a greater concern for the financial system since the crisis. Second, the disorderly resolution of a failing systemically important financial institution remains a risk. Third, financial market structures are evolving, sometimes lowering costs and promoting efficiency, but also raising potential new concerns.”
The report emphasizes the importance of cybersecurity as a primary concern, stating as follows:
“Cybersecurity incidents rank near the top of our threat assessment because of the potential for disruption of networks and the damage such disruptions could cause to financial stability and the economy.”
The report indicates the overall risk is “medium” and the financial system is much more stable than it was a decade ago at the start of the financial crisis.
The report can be accessed:
https://www.financialresearch.gov/financial-stability-reports/2017-financial-stability-report/.
