Cyberattacks on the five most active U.S. banks and even the ones with less than $10 billion in assets have the ability to significantly impact the liquidity of other banks in the system, according to a report by the Federal Reserve Bank of New York.
The report, titled "Cyber Risk and the U.S. Financial System: A Pre-Mortem Analysis," focused on how the U.S. financial system's wholesale payments network would be affected in case of a cyberattack.
The New York Fed said that such an attack on any of the five most active U.S. banks could have an average spillover impact to about 38% of the network. Conversely, a cyberattack on six banks with less than $10 billion in assets or one institution with $10 billion to $50 billion in assets could also impair one of the top five institutions.
The potential impact in forgone payment activity could reach more than 2.5 times daily GDP, should banks respond to uncertainty by hoarding cash.
The report also noted that the reconciliation and recuperation process for a cyberattack that compromised the integrity of banks' systems would be an "unprecedented task," as impacts would also affect investors, creditors and other financial market participants.
The New York Fed hopes to study how borrowers and other counterparties would respond in future reports.