Cyber attacks a major concern, Poloz says
Poloz shares unease about ripple effect of event as institutions search for solution
OTTAWA Of all the economic fears that could keep Stephen Poloz awake at night, the threat of a cyberattack is perhaps the one that troubles him the most.
The Bank of Canada governor can talk all day about household debt and how a global recession would slow down the economy, push up unemployment and make mortgage payments difficult for some people, and never lose faith that the system would be resilient enough to prevail, he said in an interview.
But a cyberattack against the financial system? Poloz admits he’s unsure what the fallout would be and he struggles to picture what such an event might look like.
For a policy-maker who carefully studies stacks of data before making a decision, the many unknowns surrounding the rapidly evolving world of cyberthreats are disconcerting, to say the least.
“It leaps up to the top of your consciousness pretty quickly — I think in many ways it’s more worrisome than all the other stuff,” Poloz said in an interview at the bank’s headquarters in Ottawa.
“Every event you hear of sounds different, or happens in a different way ... There’s all these things you and you think, ‘My God, how do I get my arms around that whole risk and what are the consequences?”’
Poloz shared his unease at a time when governments, central banks and the private sector around the world are searching for new strategies to counter hacks. Many, including the Bank of Canada, are pouring more resources into the area to learn new ways to prevent an attack, react to contain any damage, and how to pick up the pieces afterwards, if necessary.
The central bank warned Canadians in June that the country’s interconnected banks are vulnerable to a cascading series of cyberattacks, something that could undermine broad confidence in the financial system.
The report, known as the financial system review, also said such structural vulnerability could allow for the easy spread of an initial attack into other sectors, such as energy or water systems. The report urged commercial banks to cooperate on countering the threats.
It pointed to eight high-profile cyberattacks on banks in 2016, including an US$81-million heist at the Bangladesh Bank.
One recent, high-profile example was the cyberhack last summer on Equifax that compromised the personal information of 145 million Americans and 8,000 Canadians.
The federal government, including the finance and public safety departments, have been studying policy options to better protect Canada. In 2016, it promised $77 million in new money over five years to bolster cybersecurity.
The Senate’s banking, trade and commerce committee has also been studying cybersecurity.
Their efforts come amid signs that suggest Canada still has a long way to go.
A federally commissioned report last year warned the government was “simply not up to the overall challenge” of fending off cyberthreats on its own and must partner with the private sector and the U.S. to tackle the problem.