Some Principles for Regulating Cyber Risk

Anil Kashyap and Anne Wetherilt

AEA Papers and Proceedings, 2019, vol. 109, 482-87

Abstract: We explain why cyber risk differs from other operational risks in the financial sector. The form of cyber shocks differs because of their intent, probability of success, possibility of a hidden phase, and evolving form of the risks. The impact differs because problems can spread quickly and because uncertainty over the possibility of a hidden phase can impact responses. We explain why private incentives to attend to these risks may differ from societies' preferences and develop six (micro- and macroprudential) regulatory principles to deal with cyber risk.

JEL-codes: G00 K24 L51 (search for similar items in EconPapers)
Date: 2019
Note: DOI: 10.1257/pandp.20191058
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Citations: View citations in EconPapers (24)

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Working Paper: Some Principles for Regulating Cyber Risk (2018)
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