Bank cyber attacks said to prompt Fed to prepare new safeguards

[WASHINGTON] US regulators plan to require banks to adopt baseline safeguards to shield themselves from cyberthreats after a series of assaults cost the industry billions of dollars and shook consumer confidence, said people with knowledge of the matter.

The Federal Reserve is leading other agencies in crafting the protections, which would be minimum standards, said the people who asked not to be named because work on the measures isn't public. The effort stems partly from a concern that as digital breaches become more frequent and aggressive, an attack could cripple the entire financial system.

The Fed is working with the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp, said the people. Further details on the agencies' plans couldn't be determined, so it's not clear whether costly efforts that lenders have already undertaken would put them in compliance with what regulators propose.

The industry has been stunned by recent computer muggings, including a February hack of Bangladesh's central bank in which thieves made off with US$81 million and the 2014 incursion of JPMorgan Chase & Co that led to information on millions of customers being compromised. The attacks have spurred financial firms to try to fend off attacks by hiring thousands of employees to monitor threats and upgrading their technology.

The agencies' first step would be to solicit public input on ideas for boosting banks' defenses, which regulators would study before following up with a more formal proposal. The multistage rule process could stretch into next year.

BLOOMBERG