Editor’s Note: Critical infrastructure industries, including companies in the financial services and health care industries, will face increasing mandatory cybersecurity regulations irrespective of the voluntary nature of NIST’s Cybersecurity Framework.
From: Bloomberg
By Ben Moshinsky
Regulators were told by a global oversight body to decide in advance whether to force investors at a bank’s parent company or its subsidiaries to take losses in the event of a crisis.
National watchdogs should evaluate a bank’s structure before picking an approach, the Financial Stability Board, based in Basel, Switzerland, said in a statement today.
Authorities have struggled to solve the issue of too-big-to-fail lenders almost five years since the collapse of Lehman Brothers Holdings Inc. in 2008. Michel Barnier, the European Union’s financial-services chief, this month unveiled a plan for a single resolution mechanism that gives the European Commission in Brussels the power to decide when banks in the trading bloc need to be saved or shut.
“Key jurisdictions are well on the way to having the necessary legislative regimes in place,” Paul Tucker, the deputy governor of the Bank of England who also chairs an FSB committee, said in a statement. “Next steps will need to include regulatory measures to remove impediments, and changes to firms’ financial or organisational structure where necessary.”
A regulator using a single point of entry strategy would impose losses on investors in a lender’s parent company, where a multiple point of entry approach would see creditors of a bank’s international subsidiaries taking a hit in a crisis.
The FSB has been critical of attempts to implement global rules on creditor losses, saying in April that “few jurisdictions have equipped administrative authorities with the full set of powers to resolve banks.”
Cyber Attacks
While the FSB looked at risks to banks, another group of regulators issued a warning to exchanges about possible technology issues.
Equities markets may be vulnerable to cyber-attacks aimed at disrupting the financial system, the International Organization of Securities Commissions said in a separate report yesterday.
About half of the exchanges surveyed by Iosco, a Madrid-based group of global markets regulators, experienced a cyber-attack in the past 12 months.
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