Daily Management Review

ECB Asks EU Banks To Spruce Up Defences Against Potential Hacks From Russia


ECB Asks EU Banks To Spruce Up Defences Against Potential Hacks From Russia
The European Central Bank is advising banks in the eurozone to strengthen their defenses against cyberattacks, particularly in light of geopolitical tensions such as the stalemate between Russia and Ukraine, according to reports quoting the top supervisor of the ECB.
Andrea Enria was presenting the findings of the ECB's annual examination of banks, which he said indicated the banking industry had handled the coronavirus pandemic well and that capital relief measures may be allowed to expire at the end of this year.
However, the eurozone's chief banking supervisor warned of an increase in cyber threats since 2020, citing a jump in hacks.
"We are asking (banks) to strengthen their cyber regime measures and look at a potential increase in attacks and the danger of these attacks going forward,” Enria told a news conference.
The ECB specifically instructed banks to train their employees to deal with this threat and to be on the lookout for flaws in the services that are outsourced by the banks. For years, the European central bank has also conducted simulated hacks to test the preparedness of the banks.
On Wednesday, Reuters was the first to reveal that the ECB was making preparations to make the banks for a potential cyber attack on the industry by hackers sponsored by Russia.  
When asked about such a possibility, Enria said the ECB would call "banks' attention to the potential deepening of global tensions, which may indeed provoke more attacks."
Enria reported that six eurozone banks out of the 115 it regulates would fall short of the ECB's capital needs by the end of September 2021, which was lower than the nine that the ECB had flagged the previous year. Enria however noted that this shortfall was because of structural concerns such as low profitability rather than the pandemic.
He did not name the six banks but claimed two had already made up the difference. He was pleased with how banks performed during the pandemic, with most exceeding the basic standards despite piles of bad loans in several businesses.
"We are broadly satisfied with the way that banks have operated so far during the pandemic," he said. "Banks need to remain aware of the possible consequences for their balance sheets and strengthen their risk control and governance frameworks in particular."
Enria also stated that a waiver permitting banks to use some of their capital buffers, which was implemented at the start of the pandemic in 2020, will be repealed at the end of this year, as widely anticipated.