The Financial Stability Board (FSB) today published a toolkit of effective practices for financial institutions’ cyber incident response and recovery. The FSB encourages authorities and organisations to use the toolkit to enhance their cyber incident response and recovery activities.
Cyber incidents pose a threat to the stability of the global financial system, and the remote working environments in light of the COVID-19 pandemic have heightened the need for attention. A significant cyber incident, if not properly contained, could seriously disrupt the financial system, including critical financial infrastructure, leading to broader financial stability implications. Efficient and effective response to and recovery from a cyber incident is essential to limiting any related financial stability risks. Such risks could arise, for example, from interconnected information technology systems between multiple financial institutions or between financial institutions and third-party service providers from loss of confidence in a major financial institution or group of financial institutions, or from impacts on capital arising from losses due to the incident. The cyber resilience of organisations is crucial for the smooth functioning of the financial system and in engendering financial stability.
Enhancing cyber incident response and recovery at organisations is an important focus for national authorities. National authorities are in a unique position to gain insights on effective cyber incident response and recovery activities in financial institutions from their supervisory work, and their observations across multiple organisations can help suggest areas for enhancement. Authorities also have an important role to play in responding to cyber incidents that present potential risks to financial stability. Authorities may also, as appropriate, support organisations in sharing information to protect against threats that could have a detrimental impact on financial stability.
The toolkit includes 49 practices for effective cyber incident response and recovery across seven components: (i) governance, (ii) planning and preparation, (iii) analysis, (iv) mitigation, (v) restoration and recovery, (vi) coordination and communication, and (vii) improvement. The final toolkit draws on the feedback from a public consultation process, including four virtual outreach meetings. The report was delivered to G20 Finance Ministers and Central Bank Governors for their October meeting.
The FSB also published today an overview of the main issues raised in its public consultation, and describes the changes made to the final toolkit to address them.
Background
In 2017, the FSB published a Summary Report on Financial Sector Cybersecurity Regulations, Guidance and Supervisory Practices, as an initial step to promote cross-border cooperation in this area.
In 2018, the FSB published a Cyber Lexicon, which comprises a set of approximately 50 core terms related to cyber security and cyber resilience in the financial sector. It is intended to support the work of the FSB, standard-setting bodies, authorities and private sector participants, e.g. financial institutions and international standards organisations, to address financial sector cyber resilience.
The FSB coordinates at the international level the work of national financial authorities and international standard-setting bodies and develops and promotes the implementation of effective regulatory, supervisory, and other financial sector policies in the interest of financial stability. It brings together national authorities responsible for financial stability in 24 countries and jurisdictions, international financial institutions, sector-specific international groupings of regulators and supervisors, and committees of central bank experts. The FSB also conducts outreach with approximately 70 other jurisdictions through its six Regional Consultative Groups.
The FSB is chaired by Randal K. Quarles, Vice Chairman, US Federal Reserve; its Vice Chair is Klaas Knot, President of De Nederlandsche Bank. The FSB Secretariat is located in Basel, Switzerland, and hosted by the Bank for International Settlements.
