Ten years after the financial crisis, experts are looking ahead to potential systemic risks that could lead to another economic collapse.
A new report by the Depository Trust & Clearing Corp. (DTCC), released this week, detailed a number of risks to financial stability, citing cybersecurity as potentially “the most important near-term threat.”
Researchers say that although cyber-related threats are not new, they have “grown exponentially” and “undoubtedly pose a much more serious risk now than they did a decade ago.”
The DTCC said the “most alarming evolution” among cyber thieves is the transition from crimes motivated by monetary gains to those developed by state-sponsored actors and focused on geopolitical disruption, including disrupting critical infrastructure. That means cyber-attacks focused on financial institutions – which have become more frequent – have the potential “for far-reaching, systemic impacts.”
Experts have put cyber threats at the top of their risk list since 2013, and this year, the DTCC concluded that it’s a matter of “when,” not “if,” regarding the likelihood of a successful widespread attack.
In June, the International Monetary Fund (IMF) released a report that estimated financial institutions stand to lose a couple hundred billion dollars per year from cyber-attacks, eroding profitability and threatening stability. The IMF noted that the financial sector is particularly attractive to cyberattacks, and the interconnectedness of the system would allow the impact to spread.
In addition to cyber risks, the DTCC cited market-related risks including the rise in popularity of exchange-traded funds (ETFs), which drums up liquidity concerns and increased contagion risk.
International trade relations were cited as a macroeconomic risk, as well as global debt.