A New York financial regulator has cautioned against “an Armageddon-type” cyber attack on Wall Street companies that would potentially devastate the American financial markets and said that a set of new guidelines is being considered to offer protection against such a crisis.
New York’s Department of Financial Services (DFS) head Ben Lawsky expressed fears of a so-called “cyber 9/11” on firms listed at the Wall Street, calling it a “spill over into the broader economy”, which would not be different from the mortgage meltdown of 2008 in the US and rest part of the world.
Addressing a huge crowd at the Columbia Law School on Wednesday, Lawsky said, “We are concerned that within the next decade, or perhaps sooner, we will experience an Armageddon-type cyber event that causes a significant disruption in the financial system for a period of time.”
The DFS chief said that he is mulling over drafting new set of rules to compel banks and insurance firms regulated by the financial services to enable better protection against hackers.
In a bid to prevent and protect against a devastating cyber attack, Lawsky said he is planning addition of cyber security to the grades that DFS provides the banks and insurance firms regulated by it.
Financial companies “care deeply” about their grades as they can adversely influence their ability to pay dividends or carry acquisition deals with other companies, Lawsky said.
DFS has been regulating more than dozens of New York- licensed banks and insurance firms, such as Goldman Sachs, Barclays and MetLife. As DFS head, Lawsky is entitled to impose new rules and standards on the operations of banks and insurance companies, and also punish them for their bad behavior.