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Title: Some Principles for Regulating Cyber Risk

Author(s): Anil K Kashyap and Anne Wetherilt

Publication Date: November 2018

Keyword(s): cyber risk, macroprudential regulation and stress test

Programme Area(s): Financial Economics

Abstract: We explain why cyber risk differs from other operational risks in the financial sector. The form of cyber shocks differs because of their intent, probability of success, possibility of a hidden phase and evolving form of the risks. The impact differs because problems can spread quickly and because uncertainty over the possibility of a hidden phase can impact responses. We explain why private incentives to attend to these risks may differ from societies' preferences and develop six (micro- and macroprudential) regulatory principles to deal with cyber risk.

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Bibliographic Reference

Kashyap, A and Wetherilt, A. 2018. 'Some Principles for Regulating Cyber Risk'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=13324