sabine lautenschlager : cyber resilience - objectives and tools speech by ms sabine lautenschlager, member of the executive board of the european central bank and vice - chair of the supervisory board of the european central bank, at the first meeting of the euro cyber resilience board for pan - european financial infrastructures, frankfurt am main, 9 march 2018. * * * in 1903, the italian inventor marconi demonstrated his new invention, a wireless telegraph, to a large audience. it didn ’ t go too well for him, though. the machine itself did work in the sense that it transmitted a message. however, it was not the message the audience – or marconi – had expected. the word “ rats ” was being sent again and again. the system had been hacked. the culprit in this case was nevil maskelyne, a magician. allegedly, he had been hired by a british wired - telegraph company which was worried that marconi ’ s invention might ruin its business. technology has advanced a lot since 1903. and it has created a deeply interconnected world. the financial system is a case in point. no financial institution can survive, let alone thrive, on its own. no bank can do without the complex web of financial market infrastructures that underpins its day - to - day business. no bank, therefore, must underestimate the associated risks. in particular, no bank must underestimate the it risks, which include cyber risks. in the worst case, a single hack could compromise the entire system. so cyber resilience is a goal we all share. and anyone who sees it as just another competitive advantage is mistaken ; the whole chain is only as strong as its weakest link. and in that sense, many actors in the financial system are parts of the same chain. ecb banking supervision takes cyber resilience very seriously. naturally, we focus on banks and on the euro area. in doing so, we take into account that banks are not just connected among themselves but also with other market participants and infrastructures. this means that our supervision of it risks also covers the end - points of payment systems and market infrastructures in the banks directly supervised by us. in short, we aim to ensure the availability, confidentiality and integrity of banks ’ data and systems. what have we done so far and what are our plans for the future? so far, we have conducted thematic reviews on cyber risk and

of tackling cyber risk, of course. but this i would like to do within the existing framework of banks ’ risk management. cyber risk needs to be part of general risk management procedures, of general crisis management, and general business continuity planning. after all, it is an operational risk. and our experience in dealing with operational risks can help us to cope with cyber risk as well. we must keep in mind that cyber risk does not invariably arise from the technology itself but also from how we use it. it is people who are behind the hacking. and often, it is people who leave doors unlocked and gates wide open for cyber criminals to sneak in. people play a big role when it comes to cyber resilience. thus, it makes sense to draw on the principles we have established for risk management and governance, and on the experience we have gained in these areas. ladies and gentlemen, i am aware that this kind of work is unlikely to capture the public ’ s attention in the same way as mr maskelyne did in 1903. but it needs to be done. while cybercrime may have an aura of mystery and power, cyber resilience is quite the opposite : it calls for vigilance and diligence, day in, day out. thank you. 2 / 2 bis central bankers'speeches