About the Event

The Qatar Centre for Global Banking & Finance welcomes Kartik Anand from Deutsche Bundesbank to present this virtual seminar. 

 

Paper Abstract

Cyber attacks can impair banks' operations and precipitate bank runs. When digital infrastructure is shared, banks defend themselves by investing in cybersecurity but can free-ride on the security measures of others. Ex ante free-riding by banks interacts with the ex post coordination frictions underpinning bank runs. While the temptation to free-ride induces under-investment in cybersecurity, the prospect of a run encourages greater investment. System-wide cybersecurity is suboptimal and sensitive to rollover risk. Regulatory measures, including negligence rules and cyber hygiene notices, facilitate constrained efficient cybersecurity investment.