In an effort to help safeguard the global financial system from potentially systemic cyberattacks, and other operational threats, the Financial Stability Board (FSB) is proposing to standardize reporting of these kinds of incidents.
The FSB is asking for feedback on a proposed common format for financial firms reporting major operational issues such as cyberattacks. This consultation aims to facilitate the reporting and sharing of information on major incidents that have the potential to cascade throughout the global financial system.
The global policy group noted that current differences in reporting across jurisdictions have fragmented the requirements that firms face, making it harder to coordinate responses to incidents that could prove contagious. This challenge “could exacerbate financial stability risks arising from operational incidents,” the FSB warned.
As a result, the global policy group is seeking to harmonize incident reporting, which it said would make it easier to facilitate efficient responses to — as well as recovery from — operational issues faced by financial firms.
Another benefit would be more effective supervision and cooperation among regulators.
“Effective incident reporting strengthens supervision and regulation, fostering transparency and accountability in financial institutions by ensuring regulators are promptly informed of significant operational issues,” the FSB said in a release accompanying its consultation.
The FSB’s proposed framework, developed in consultation with the private sector, is designed to enhance flexibility and interoperability, the group noted.
For example, financial institutions can use the framework to report to regulators and communicate with their external service providers, the FSB suggested, while regulatory authorities could utilize it to promote convergence with existing reporting frameworks.
The FSB’s consultation is open until Dec. 19.