CYBER RESILIENCE IN U.S. REPO AND SHORT-TERM FUNDING MARKETS: A REVIEW OF LIQUIDITY STRESS SCENARIOS AND CAPITAL ADEQUACY

This review discusses cyber resilience in the context of U.S. repurchase agreement (repo) and short-term funding markets set against a backdrop of liquidity stress scenarios affecting their capital adequacy implications amid an evolving digital financial landscape. The research examines the potential of cyber threats directed at several payment systems, FMIs, and settlement networks to disrupt flows of liquidity and how that can drive systemic risk and undermine the credibility of existing regulatory frameworks. It looks at operational resilience, the use of stress-testing methodologies and prudential standards to enhance financial institutions' capacity to absorb shocks stemming from cyber events. The review underscores the desirability of comprehensive approaches that integrate cybersecurity, liquidity risk management and capital planning for stability in wholesale funding markets.