By Francesco Canepa
FRANKFURT (Reuters) – European Union (EU) countries must step up their defences against cyber attacks on their financial infrastructure as the war in Ukraine raises the risk of hacks by foreign powers, the bloc’s systemic risk watchdog said on Tuesday.
European states have raced to protect their energy infrastructure from physical attacks but the European Systemic Risk Board (ESRB) said more needed to be done against cyber warfare against financial institutions and the telecommunications networks and power grids they rely on.
“The war in Ukraine, the broader geopolitical landscape and the increasing use of cyber attacks have significantly heightened the cyber threat environment,” the ESRB said in a report.
“There is an increased risk of cyber attacks on the EU financial system by states or state-sponsored actors.”
Specifically, the watchdog said national authorities should start carrying out stress tests and impact analyses, using tools developed by the ESRB to identify weaknesses and measure their resilience to attacks.
“The ESRB will consider which operational policy tools are most effective in responding to a system-wide cyber incident and identify gaps across operational and financial policy tools,” it added.
The ESRB, which is comprised of the EU’s central banks and prudential watchdogs, primarily focuses on financial risk but it broadened the scope of its analysis to the infrastructure used by banks and other institutions.
The European Commission in October proposed stepping up measures to protect its critical infrastructure, with energy among its chief areas of focus following the possible sabotage of the Nord Stream gas pipelines a month earlier.
That incident put governments on high alert and prompted some to send in the military to secure what they see as increasingly vulnerable energy systems.
