Cyber-attacks are capable of triggering a financial crisis: Jerome Powell

Washington, April 12 2021: According to Federal Reserve chariman, Jerome Powell, the risks of an economic crisis resulting from cybe attacks is much greater than a large scale financial crisis such as the one in 2008 that required government bail outs.

He shared these views on a CBS show. He said the risks posed evolve as the world changes and the most pertinent threat at present is that from cyber attacks, a concern shared by governments and private businesses meaning the need for financial businesses in particular to invest in cyber security.

One of the threat scenarios being considered by the Fed include; breaking down of a large payments system and payments can’t be completed thereby causing a large financial institution to lose ability to track payments.

Powell was also asked about the possibility of creating a digital dollar, as China last month became the first global economic power to unveil a cryptocurrency. He said that for now, the Fed was evaluating. He also said the Fed was developing software and even designing the look of a digital US dollar, but the final decision on whether to make it public would only be made once its impact was fully understood.

Last October, Powell had already indicated that the United States was thinking about issuing its own cryptocurrency, but he warned then that a full assessment of the benefits and risks would take time.

When asked about the future economic outlook, Powell said it was “at an inflection point”: growth and employment would accelerate in the coming months, he predicted. But he once again insisted that the Covid-19 pandemic continued to present a risk.

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