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Project on Cyber Risk to Financial Stability (CRFS)

In December 2018, the Project on Cyber Risk to Financial Stability, led jointly by the Program on Future Cyber Risks and the Initiative on Central Banking and Financial Policy, published its working paper, entitled "The Ties That Bind: A Framework to Assess the Linkage Between Cyber Risks and Financial Stability". This paper builds on an earlier SIPA-authored publication, "The Future of Financial Stability and Cyber Risk," published by the Brookings Institution in October 2018.

The first paper provides a general review of cyber risk to financial stability, contains a primer on financial stability and cyber risks, and highlights how cyber risks are different from other systemic financial risks. It also summarizes previous reports and efforts of policymakers and industry addressing these issues. 

The second paper, published by SIPA, developed a unique framework to assist analysts trying to assess how specific cyber risks might affect financial stability. 

Since 2016, the Project on CRFS has hosted a series of engagements bringing together experts from financial institutions, the public sector including regulators and other policymakers, academics and practitioners with backgrounds in finance and cybersecurity. On April 18, 2017, SIPA hosted a workshop intended to tie together the work on cybersecurity conducted by the financial sector with the long-existing work of academics and financial experts on financial stability and resilience. The output of this workshop would create the agenda for needed research and policy analysis in the field of financial stability implications of cyber risks.

On May 10, 2018, SIPA hosted the first of two workshops that began the process to devise and refine a cyber risk and financial stability framework, emphasizing three pillars: financial stability, cyber risk, and transmission channels between the two. The second workshop, hosted on July 10, 2018 further developed the conceptual framework and explored amplifiers and dampeners of risk by focusing on a single market - the US treasury securities market.

In addition to its workshops and publications, CRFS has achieved meaningful recognition, presenting its approach at convenings of the Atlantic Council, the International Institute of Finance and its Market Monitoring Committee, a joint session of the Financial and Banking Information Infrastructure Committee (FBIIC) and the Financial Services Sector Coordinating Council (FSSCC), and the International Monetary Fund's (IMF) "Workshop on Supervision Activities to Build Cybersecurity." The CRFS work can also be reviewed on podcast and blog for Lawfare.

The Cyber Risks to Financial Stability Project team includes: Jason Healey, Director of the Program on Future Cyber Risks and Senior Research Scholar at SIPA; Patricia MosserDirector, MPA Program in Economic Policy Management; Director of the Initiative on Central Banking and Financial Policy and Senior Research Scholar and Senior Fellow at SIPA; Katheryn Rosen, SIPA Adjunct Professor of International and Public Affairs and former Deputy Assistant Secretary for Financial Institutions Policy of the US Department of Treasury. The project also includes Merit E. Janow, the Dean of SIPA.

The Future of Financial Stability and Cyber Risk

Working Paper The Ties that Bind: A Framework to Assess the Linkages Between Cyber Risks and Financial Stability

The Lawfare Blog: Cyber Risks to Financial Stability

The Lawfare Podcast: Cybersecurity and Financial Stability 


The CRFS hosted its inaugural State-of-the-Field Conference at the Federal Reserve Bank of New York on April 12.