Cybersecurity and geopolitical risks in financial markets

Cyber incidents are escalating in magnitude, sophistication and geopolitical relevance, exposing critical weaknesses in the global financial system. This paper highlights three mutually reinforcing vulnerabilities: supply chain/third-party exposure, heightened systemic risk in rapidly digitalising developing regions, and strong timing effects that amplify shocks during market stress. The paper also recognises that cybersecurity extends beyond a purely technical concern and has broader macro-financial and economic-security implications. Finally, the paper emphasises a set of measures for financial firms and financial sector supervisors to contain propagation channels, safeguard confidence and reinforce financial stability.