Cyber attacks loom as growing corporate credit risk: Moody’s

[Audrey McNeil <audrey () riskbasedsecurity com>]

http://www.businessinsider.com/r-cyber-attacks-loom-as-growing-corporate-credit-risk-moodys-2015-11

Cyber attacks on the private sector are an increasingly important risk in
corporate credit analysis, U.S. ratings agency Moody’s Investors Service
said on Monday.

The threat of computer hacking varies from sector to sector and remains
hard to measure because intrusions often go undetected or are not publicly
disclosed, Moody’s said.

Likening cyber attacks to natural disasters, the agency said the two pose
similar challenges in anticipating the duration or severity of problems in
calculating ratings impact.

“We do not explicitly incorporate the risk of cyber attacks into our credit
analysis as a principal ratings driver,” the report said. “But across all
sectors, our fundamental credit analysis incorporates numerous
stress-testing scenarios, and a cyber event, like other event risks, could
be the trigger for those stress scenarios.”

Moody’s said cyber defense, detection, prevention and response will be a
higher priority in credit assessments.

Risk awareness is growing and is a credit positive, the agency said, but it
added that reducing risk is hard because the threats constantly evolve.

Electric, natural gas, water and power plants are one of the highest-risk
sectors “because a successful disruption of utility services would trigger
material knock-on effects to all other sectors,” the report said.

Larger utilities serving more people are likelier targets for hackers,
though smaller ones may be less prepared to defend themselves, Moody’s
noted.

It added that the government likely would intervene swiftly in a crippling
cyber attack, reducing potential risk, which also confront
telecommunications, data networks reliant on cloud computing services,
retail, oil and gas, banking and housing.

Businesses possessing great quantities of personal data, such as financial
or health care institutions or universities, risk major hacks, the report
said.

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