Speed Reads

cyber insecurity

Fed chair: As world evolves, 'cyber risk' becomes greater threat

Federal Reserve Chairman Jerome Powell says the chances of another global financial crisis like the one that hit in 2008 is "very, very low." Instead, he told 60 Minutes during an interview that aired Sunday night, "the risk that we keep our eyes on the most now is cyber risk."

The economy is "ever changing," Powell explained to correspondent Scott Pelley. "The globalization of the economy and technology have enabled manufacturing to take place all around the world. It's very hard for people in wealthy countries to raise prices or to raise wages. It's hard for workers to raise wages when wages can move overseas. It's just a different economy."

When Pelley asked Powell about the chances of the world experiencing "a systemic breakdown like in 2008," the chairman said the prospect of having a "breakdown that looked anything like that, where you had banks making terrible loans and investment decisions and needing and having low levels of liquidity and weak capital positions, and thus needing a government bailout, the chances of that are very, very low. Very low."

The world evolves, though, and as such "the risks change as well," Powell said. "And I would say that the risk that we keep our eyes on the most now is cyber risk." The scenarios in this case involve "a large financial institution" losing the ability to "track payments that it's making," Powell said. "Where you would have a part of the financial system come to a halt, or perhaps even a broad part. And so, we spend so much time and energy and money guarding against these things. There are cyber attacks every day on all major institutions now. That's a big part of the threat picture in today's world."