Cyberattacks are the top underappreciated risk to the U.S. financial system, and Congress should do much more to prepare for attacks on banks, Federal Reserve Chairman Jerome Powell warned Congress on Wednesday.
Powell’s comments were prompted by questioning from Rep. Jim Himes, D-Conn., who asked him at a House Financial Services Committee hearing what threats to the financial system might be going unnoticed. Powell pointed to cyberattacks, and said Congress should do “as much as possible, and then double it.”
“The thing that is really hard is the idea of a successful cyberattack,” Powell said.
Banks have to do more to improve cyber “hygiene,” he said, by updating protections as they become available. He also said the government has to prepare for the fallout of a successful breach of a bank.
Otherwise, he said, more predictable risks to the financial system are moderate, although some assets, such as commercial real estate, are high.
“I wouldn’t use the ‘bubble’ word here, but I would say that many financial asset prices are elevated above their normal ranges,” he said.
