On Sunday, Federal Reserve Chair Jerome Powell spoke about the ongoing cyber threats to American banks saying that massive resources are invested into ensuring the protection of financial institutions, which is not limited to just banks.
What Happened: In an interview with CBS News 60 Minutes, Powell was asked "how great is the threat of a cyberattack on the American banking system?"
In response Powell said, American banks, the government, and all supporters of the banking system are highly vigilant against cyberattacks. It represents a distinct risk compared to traditional concerns like making poor loans or the withdrawal of deposits.
"It’s kind of a different risk, you know? The traditional risks are more — you make bad loans, or depositors decide to take their money out of the bank, and things like that," he said.
He went on to say that his challenge demands significant attention, investment, and effort to safeguard not only banks but also various financial entities, including market utilities.
"You have to fight that battle every day. It’s never going to be over. And so I just think we’re really committed to doing, to doing exactly that."
When asked if the Fed is "doing enough" to help these banks, Powell said, they don't have the biggest role, but their responsibility is to actively engage with the banks and they supervise and regulate to ensure the implementation of robust cyber defenses.
He added, "So, yes, we play a role. Lots of parts of the government play a role in this. And the banks themselves invest enormous amounts of money in cyber protection."
"You’ve got to keep investing and staying caught up or getting ahead. That’ll never stop. So, there’ll never be a moment when you can take a breath and think, ‘Yeah, we’ve got this.' It’s just gonna be a race to keep up and protect these institutions. And so, that’s what we’re doing. That’s what we’ve been doing for a number of years now. And we’ll keep doing it," Powell stated.
Why It's Important: Last year, a cyberattack on the New York branch of the Industrial and Commercial Bank of China, caused significant disruptions in the U.S. Treasury market.
At the time it was reported that the attackers exploited three vulnerabilities flagged by the FBI and the Department of Homeland Security earlier in March.
In December 2023, the Financial Stability Oversight Council, under the leadership of Treasury Secretary Janet Yellen, underscored artificial intelligence as a potential risk to the nation's financial system.
Photo Courtesy: Flickr
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