U.S. regulators highlighted concerns about the potential for a cyber attack that could "significantly disrupt the workings of the financial system" as they presented an annual look at the challenges facing the economic sector.
The report from the Financial Stability Oversight Council, released Tuesday, cited large-scale data breaches during the past year that hit U.S. retailers and the high-profile attack that crippled computers at Sony, and stressed the need for having plans in place to respond to attacks.
"Malicious cyber activity is likely to continue, and financial sector organizations should be prepared to mitigate the threat posed by cyber attacks that have the potential to destroy critical data and systems and impair operations," the report said.
Treasury Secretary Jack Lew chairs the council that also includes senior financial regulators such as Federal Reserve Chair Janet Yellen and the heads of the Securities and Exchange Commission and Federal Deposit Insurance Corporation.
Lew said Tuesday in presenting the report that the panel emphasized the need for companies and the government to share information.
"The private and public sector also need to work together to maintain robust plans for responding to a significant cyber incident," he said. "Improvements in the response to and recovery from cyber attacks will further protect the financial system as the negative effects of cyber attacks can be mitigated more effectively."
The report also called for technological improvements to boost cyber security, saying the financial sector in particular is "highly dependent" on interconnected computer systems.
The council was created in 2010 in the aftermath of the financial crisis with the task of identifying risks that could pose a threat to the stability of the U.S. financial system.
Its latest report also calls attention to the potential for persistent low interest rates to push financial firms to seek investment opportunities that could bring higher rates of return but also carry higher risks of failure. It also highlights the potential ripple effect from foreign economies, such as the situation in Greece, saying regulators and the private sector need to "remain vigilant" in monitoring developments and their possible consequences.
