MNI BRIEF: Russia Tensions May Up Banks' Cyber Risk-ECB Enria

Cyber-attacks against banks could increase as a result of rising global tensions, and with the threat of sanctions against Russia a specific concern, ECB Banking Supervisory chair Andrea Enria said in answer to journalists' questions Thursday. Euro area banks’ exposure to Russian and Ukrainian counterparties is limited, he said, but SSM supervisors are increasingly focusing on banks’ readiness to resist cyber threats generally, and he urged institutions to boost their defences.

Enria highlighted the potential danger to banks posed by even a gradual exit from a negative interest rate environment. A smooth exit from low interest rates is in general positive for banks, he said, but any sudden shocks could hit fringe areas of banks’ portfolios, such as highly leveraged loans and high-risk exposure to non-banking financial companies. Rate hikes could also dampen growth, he said, and with inflation differentials also driving different monetary policy paths globally, banks with high levels of exposure to emerging markets could face negative impacts.