FCA chief warns UK financial system "not prepared" for rising global and cyber risks

"The impact of modern conflict now reaches 'balance sheets, funding, markets and consumers as much as any battlefield.'"

""Whether it's a cyber-attack or a production shock - they move yields and test confidence," he said. "And we are not prepared, tactically or strategically.""

""Globally, a fraction of catastrophe and cyber risks are insured," Rathi noted. "The rest migrate to company P&Ls, credit ratings, risk premia, prices, and ultimately to households. And when cover is this low, it hits the Exchequer. That, along with the impact on livelihoods, drives popular anger.""

The UK financial system lacks tactical and strategic preparedness for rising geopolitical and cyber threats that now affect balance sheets, funding, markets and consumers. Cyber-attacks and production shocks move yields and test market confidence while incidents have targeted ATMs, payments systems and shipping routes such as the Red Sea corridor. UK firms are potentially massively under-insuring against systemic and catastrophe risks, shifting losses onto company P&Ls, credit ratings, risk premia, prices and households and increasing Exchequer exposure. Money laundering and financial crime have risen, with estimates showing large annual drains on the economy equivalent to several percent of GDP.

Read at Business Matters