A global watchdog has warned firms and regulators around the world need to develop a more cohesive response to the threat of online assaults.
Greg Medcraft, chairman of the board of the International Organization of Securities Commissions (also known as Iosco), told the Financial Times that the next major financial shock will come from cyberspace. He warned cyber crime has “a huge potential impact on markets,” and said firms and regulators need to be proactive to ensure their risk management approach is robust.
The comments come after EBay, Supervalu and Target have reported an attack to their system in the past year. Sony’s PlayStation generated headlines over the weekend when it disclosed an attack on its network. Cyber security is a major concern for governments as well, with President Barack Obama having declared that the cyber threat is “one of the most serious economic and national security challenges we face as a nation.”
The cost of cybercrime and cyber espionage to the global economy is probably measured in the “hundreds of billions of dollars,” according to McAfee and the Center for Strategic and International Studies in a report issued last year. That report estimated global cyber activity cost between $300 billion to $1 trillion, or between 0.4% to 1.4% of global gross domestic product.
Medcraft told the FT that there needed to be a more concerted effort to combat cyber threats across the globe, saying current approaches varied widely. He said a good starting point would be to look at what the U.S. has done and see how those risk-management strategies could be translated across the world.
Iosco promotes the implementation of internationally recognized standards for securities regulation, and claims 95% of the world’s securities markets as its members. Its members include over 120 securities regulators and 80 other securities markets participants, such as stock exchanges.
