This article first appeared on Floating Path.
On Tuesday, a large-scale and coordinated war game will be played in London. However conventional weaponry will be lacking during “Walking Shark II” as the simulated attack is an electronic one directed at the heart of England’s financial system.
Simulations are likely to include how banks ensure the availability of cash from ATM machines or deal with a liquidity squeeze in the wholesale market and how well firms communicate and coordinate with authorities and each other. There will be a particular focus on investment banking operations, one of the sources said.
Market participants and the government are growing increasingly fearful of a cyber terror attack on financial systems. This will be the seventh market-wide test enacted by British officials. In all, 87 firms will be involved, including banks, hedge funds, brokers and all appropriate government bureaus.
Given the growing intricacy and intertwined nature of the global financial system, these drills serve a logical purpose. In explaining this type of scenario and how it correlates with the massive amounts of data involved markets, @CalConfidence talked about the dangers of high frequency financial terrorism.
Now imagine the smartest minds we have focused on and picture their intent not being keen on ROI but on chaos and havoc. Imagine someone has all this information regarding given perceptions of all participants within the US capital market structure, from equities to futures to commodities to currency to bonds for any given millisecond.
Recently in the U.K., eight people were arrested after a cyber attack on the computer system of a branch of Barclays, and twelve others were arrested for allegedly planning to steal millions of pounds from a Santander branch with a remote device.