‘Malicious Disruptions’ Threaten Financial System: Fed Official

A top Federal Reserve official warned on Tuesday of potential risks to financial stability from cyberattacks on the U.S. payments system and from a looming funding gap in public pensions.

Lockhart is the latest in a string of government officials and corporate executives who have warned of the potential danger of cyberattacks on the U.S. In October, Defense Secretary Leon E. Panetta warned that the U.S. faced the possibility of a “cyber-Pearl Harbor” from hackers who could dismantle the nation’s power grid, transportation system, and financial and government networks.

“Our radar should scan widely — beyond the most obvious sources of risk,” said Lockhart, according to the text of his speech, arguing that markets viewed by some as too small to cause much trouble before the 2008 crisis had ended up posing systemic-scale problems.

Homing in on the issue of cyber security, he said the fragmented nature of the U.S. payments industry and its rapid evolution were creating many areas of vulnerability.

“A real financial stability concern, however, is the potential for malicious disruptions to the payments system in the form of broadly targeted cyberattacks,” he said.

Full article: ‘Malicious Disruptions’ Threaten Financial System: Fed Official (CNBC)

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