Cyber risk and the U.S. financial system: A pre-mortem analysis

A-Tier
Journal: Journal of Financial Economics
Year: 2022
Volume: 145
Issue: 3
Pages: 802-826

Score contribution per author:

1.341 = (α=2.01 / 3 authors) × 2.0x A-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We model how a cyber attack may be amplified through the U.S. financial system, focusing on the wholesale payments network. We estimate that spillovers of an attack on one of the five most active banks would impair 31% of the network, on average, with some days significantly worse. When other banks respond by liquidity hoarding, forgone payment activity can reach more than 2.5 times daily GDP. A reverse stress test shows attacks on groups of small banks can also impair a significant amount of the network. Interconnectedness through third-party providers and financial market utilities poses additional risks.

Technical Details

RePEc Handle
repec:eee:jfinec:v:145:y:2022:i:3:p:802-826
Journal Field
Finance
Author Count
3
Added to Database
2026-01-25