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The Propagation of Cyberattacks through the Financial System: Evidence from an Actual Event

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  • ANTONIS KOTIDIS
  • STACEY L. SCHREFT

Abstract

This article quantifies the effects of a multiday cyberattack that forced offline a technology service provider (TSP) to the banking sector. The attack impaired customers’ ability to send payments through the TSP, but the business continuity plans of banks and the TSP reduced the effect by more than half. Large banks performed better. Through contagion, banks not directly exposed to the attack experienced a liquidity shortfall, causing them to borrow funds or tap reserves. The ability to send payments after hours helped avoid further contagion. These results highlight the importance of preparedness by the private and official sector for cyberattacks.

Suggested Citation

  • Antonis Kotidis & Stacey L. Schreft, 2025. "The Propagation of Cyberattacks through the Financial System: Evidence from an Actual Event," Journal of Finance, American Finance Association, vol. 80(6), pages 3313-3358, December.
    • Handle: RePEc:bla:jfinan:v:80:y:2025:i:6:p:3313-3358
    DOI: 10.1111/jofi.13475
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    Cited by:

    1. R. Jay Kahn & Neth Karunamuni & Mark Paddrik, 2026. "Short Circuiting Short-Term Funding," Working Papers 26-02, Office of Financial Research, US Department of the Treasury.

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