The drivers of cyber risk

Iñaki Aldasoro, Leonardo Gambacorta, Paolo Giudici and Thomas Leach

Journal of Financial Stability, 2022, vol. 60, issue C

Abstract: Cyber incidents are becoming more sophisticated and their costs difficult to quantify. Using a unique database of cyber events across sectors in the US, we document the characteristics and drivers of cyber incidents. Cyber costs are higher for larger firms and for incidents that impact several organisations simultaneously. Events with malicious intent (i.e. cyber attacks) tend to be less costly, unless they are on the upper tail of the loss distribution. The financial sector is exposed to a larger number of cyber attacks but suffers lower costs, on average. The use of cloud services is associated with lower costs, especially when cyber incidents are relatively small. As cloud providers become systemically important, cloud dependence is likely to increase tail risks. Finally, we document that higher expenditure on IT is associated with future reduced costs from cyber incidents.

Keywords: Cyber risk; Cloud services; Financial institutions; Cyber cost; Cyber regulation (search for similar items in EconPapers)
JEL-codes: D5 D62 D82 G2 H41 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1572308922000171
Full text for ScienceDirect subscribers only

Related works:
Working Paper: The drivers of cyber risk (2020)
Working Paper: The drivers of cyber risk (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:finsta:v:60:y:2022:i:c:s1572308922000171

DOI: 10.1016/j.jfs.2022.100989

Access Statistics for this article

Journal of Financial Stability is currently edited by I. Hasan, W. C. Hunter and G. G. Kaufman

More articles in Journal of Financial Stability from Elsevier
Bibliographic data for series maintained by Catherine Liu ().