In the UK, the Financial Policy Committee of the Bank of England (FPC) formally recognised this risk to financial stability in June 2013. It recommended that the authorities should assess, test and improve the resilience of core parts of the UK financial sector to cyber attack. The FPC has maintained oversight of this programme of work which has included a number of strands, not least the ‘CBEST’ vulnerability testing of critical financial firms and FMIs. 15  Improving resilience to cyber risk is one part of the Bank’s wider work on broader operational resilience. Operational resilience is not a technical issue, especially for the infrastructure firms that need to act as ‘systemic risk managers’. It must begin in the boardroom. The Bank has worked with supervised firms to improve governance, so that standards can be maintained or strengthened, and threats responded to, without regulatory or supervisory pressure. The Bank of Bangladesh incident also shows why, given the critical nature of the services provided by SWIFT, effective international coordination in its oversight is essential. Oversight of SWIFT is led by the National Bank of Belgium (NBB) as SWIFT is a Belgian company. However, the NBB has for many years conducted the oversight of SWIFT in coordination with other central banks, including the Bank of England. These arrangements proved important in maintaining the confidence of regulatory authorities worldwide in the aftermath of the attack. And the oversight arrangements have now been extended in scope to cover the implementation of the crucially important customer security programme.
1  2  These global pipes fulfill three functions :   international payments systems enable money to move at the click of a mouse – and incidentally mean that central bankers are no longer at risk of getting their heads blown off trying to effect cross border payments;    international securities settlement enables the ownership of financial assets to change hands quickly and safely, often without the movement or amendment of any physical documentation of ownership; and,    central clearing systems enable participants in international financial markets to manage the counterparty risks in financial contracts that can last for decades. “Clearing” of financial activity has a number of meanings. I am here referring to central clearing, to the central counterparties (CCPs) that manage the risks of financial contracts rather than to the clearing of payments. 3  Three points are worth highlighting about this global plumbing. First, it is true that it is almost entirely private sector built and owned either by their users or as independent profit-maximising companies. 1  Based on Bank of England calculations, using data from 23 jurisdiction. Data from Bank for International Settlements, ‘Statistics on payment, clearing and settlement systems in the CPMI countries: Figures for 2015’. December 2016. http://www.bis.org/cpmi/publ/d155.pdf 2 I have excluded Trade Repositories from this list; the Bank does not supervise Trade Repositories. 3 Financial sector participants in a network will have both claims on each other and liabilities to each other.