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FRM Part II · FRM Exam Part II · Digital Resilience and Financial Stability: The Quest for Policy Tools in the Financial Sector

Which information-sharing arrangement best supports macroprudential monitoring of digital risk?

Standardised, timely incident reporting to authorities that can be aggregated is best, because it reveals common vulnerabilities and emerging threats across the system. Secrecy or annual accounts give no system view, and broadcasting live vulnerabilities publicly would assist attackers.

  1. AEach firm keeps incident details confidential to protect its reputation
  2. BOnly annual financial statements are used to assess cyber exposure
  3. CStandardised, timely incident reporting to authorities that can be aggregated to identify common vulnerabilities and emerging threatsCorrect
  4. DPublic disclosure of every firm's technical vulnerabilities in real time

Explanation

Standardised and timely reporting lets authorities aggregate data and spot common vulnerabilities. Keeping details confidential or relying on annual accounts gives no system view, and publishing live vulnerabilities would help attackers and create risk.

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