Hackers Are Increasingly Targeting Central Banks and Their Treasury of Over $12,550B in Reserves.
The Government Pension Fund of Norway suffers 100,000 attacks per year.
Cybersecurity is a topic taken extremely seriously by central bankers. Christine Lagarde, the president of the European Central Bank (ECB), received a text message this year purporting to be from former Chancellor Angela Merkel. It asked her to join her on WhatsApp to communicate more securely. Rightly suspicious, the ECB President did not respond.
Christine Lagarde was the target of a hacking attempt, confirmed the ECB after an article in Business Insider dating from early July 2022.
New Zealand, Pakistan, Zambia, Chile, Indonesia, Tunisia ... Central banks and state institutions on all continents are facing an upsurge of computer attacks and blackmail (for ransom) increasingly sophisticated. The Government Pension Fund of Norway (1,195 billion euros of capital) is subject to no less than 100,000 computer attacks per year. Every day, the world's largest sovereign wealth fund has to fend off three intrusion attempts deemed “serious,” it explained to the Financial Times.
Espionage, theft, manipulation, … Central banks are prime targets. Their 12,550 billion dollars of reserves constitute a hoard coveted by groups of hackers, some of whom work for states such as North Korea. About ten years ago, computers of the Australian central bank were compromised and infected by a virus of Chinese origin. Activists who manage to hack a central bank's website by publishing a false monetary policy statement could cause chaos in the markets.
Central banks in emerging countries have increased their cyber security budgets more since 2020 than their counterparts in major developed countries, according to a study by the Bank for International Settlements. Central banks of all origins are concerned about being the target of a sophisticated, large-scale cyber attack by a criminal group or a state. They can be abused by an infected software, without the knowledge of their usual supplier.
The training of their employees in the right reflexes in terms of cybersecurity is an essential axis. The lack of vigilance of a single employee can compromise his organization if he is a victim of phishing. Under its spoofed login, hackers can gain access to very sensitive central bank information.
Lack of investment in cybersecurity
Central banks note that the financial sector as a whole (banks, financial institutions ...) is vulnerable to cyber risks, due to a lack of investment for its protection. But they are far from having all set an example by allocating adequate resources to their cybersecurity.
Central banks estimate that institutions under their jurisdiction have increased their cybersecurity budgets by less than 10% since the pandemic, and one in five have not increased them at all. Losses from cyberattacks (ransomware, business disruption ...) have increased in the international financial system.
The fintech sector is considered more vulnerable than the banking sector. When the latter are victims of cyber attacks, they are most often required to notify their supervisor, but they are never obliged to make public communication. Their reputation can be affected, leading to a drop in their share price if they are listed.
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