A Persistent and Systemic Threat Is Also a Common Thread

Asked in a capital markets panel discussion if he thinks more about AI than any other issue, O’Hanley replied, “Except for cyber.”

By Jeffrey Kutler, 

That aligns with surveys that for years have placed cybersecurity at or near the top of risk management concerns and priorities. A recent spate of financial stability reports from the International Monetary Fund, the Federal Reserve Board and other authorities reflect those perceptions while also delving into the complexities of “polycrisis” (also a Milken Conference topic).

The European Central Bank, for example, in its May 2024 stability review warned of a “variety of channels” through which geopolitical risk could adversely affect the global economy; saw “a greater need to respond to cyber and climate risks, and strong interlinkages with the non-bank financial intermediation sector,” posing challenges to banks in its region; and said the banks “need to press ahead with digital transformation, not least so that they can respond to the growing threat of cyber risks as well as address the opportunities and challenges associated with the rise of artificial intelligence.”

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