Israel led a 10 day, 10-country simulation of a major cyber attack on the global financial system to increase cooperation that could minimize any potential damage to financial markets and banks. Participants in the initiative, called “Collective Strength”, included treasury officials from Israel, the United States, the UK, United Arab Emirates, Austria, Switzerland, Germany, Italy, the Netherlands and Thailand, as well as representatives from the International Monetary Fund, World Bank and Bank of International Settlements.
The simulated cyber attack uncovered sensitive data on the Dark Web along with fake news reports that ultimately caused chaos in global markets and a run on banks.
Numerous types of malicious attacks were performed in real-time that would create havoc on global foreign exchange and bond markets, liquidity, integrity of data and transactions between importers and exporters.
“These events are creating havoc in the financial markets,” said a narrator of a film shown to the participants as part of the simulation and was seen by Reuters and reported by NASDAQ.
Israeli government officials said that “such threats are possible in the wake of the many high profile cyber attacks on large companies, and that the only way to contain any damage is through global cooperation since current cyber security is not always strong enough”.
“Attackers are 10 steps ahead of the defender,” Micha Weis, financial cyber manager at Israel’s Finance Ministry, told Reuters.
In the narration of the released video shown to the governments involved showed that the participants were under pressure to clarify the impact of the attack, paralyzing the global financial system.
“The banks are appealing for emergency liquidity assistance in a multitude of currencies to put a halt to the chaos as counterparties withdraw their funds and limit access to liquidity leaving the banks in disarray and ruin,” the narrator said.
Multilateral policies were discussed to respond to the crisis, including a coordinated bank holiday, debt repayment grace periods, SWAP/REPO agreements and coordinated delinking from major currencies.
Rahav Shalom-Revivo, another Israeli financial cyber official, said “such a wide-ranging attack on the global financial system would need to be done by sophisticated attackers”.
Originally scheduled to take place at the Dubai World Expo, it was moved to Jerusalem due to the Omicron variant of COVID-19, with the officials participating via video conference.
If this were a real cyber attack, governments would need to take respond more rapidly than what was demonstrated in the simulation.
Steven Scheer of Reuters also reported that one European financial official said that in the case of such of an attack, “As soon as the supply of money [was] hampered, at least in the European Union, we would probably have an emergency meeting on the same day,” he said, adding that he would immediately reach out to counterparts across Europe and the United States.