Bruegel: Hybrid and cybersecurity threats and the European Union’s financial system

12 September 2019

Exploring preparations to increase the resilience of the financial system authors find that the EU finance ministers should advance a broader political discussion on the integration of the EU security architecture applicable to the financial system.

Increasing cyber and hybrid risks will test the European Union’s system of fragmentation on issues of security but centralisation on financial and other economic issues. This asymmetry was not an obstacle in a world in which security threats were more contained or of a different nature. But the world is changing.

The authors document the rise in cyber attacks in the European Union. Meanwhile, hybrid threats, involving conventional and non-conventional means, are real, though difficult to quantify. The authors explore preparations to increase the resilience of the financial system in terms of regulation, testing and governance. The authors find that at the individual institutional level, significant measures have been taken, even though there are diverging views on whether individual companies are sufficiently prepared. More worryingly, preparations appear less advanced at the system-wide level.

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