[ by Howard Haykin ]

Dennis Lockhart, President of the Federal Reserve Bank of Atlanta, warned on Tuesday of potential risks to financial stability from cyberattacks on the U.S. payments system and from a looming funding gap in public pensions.  Mr. Lockhart is the latest in a string of government officials and corporate executives who have warned of the potential danger of cyberattacks on the U.S.

President Barack Obama recently wrote an opinion piece in the The Wall Street Journal on these concerns, while Defense Secretary Leon Panetta spoke in October on the possibility of a “cyber-Pearl Harbor” from hackers who could dismantle the nation’s power grid, transportation system, and financial and government networks.

Mr. Lockhart's delivered his message in a speech to a conference held in Germany.  He said that that, at a global level, the span of vigilance needed to be extremely broad.  "Our radar should scan widely — beyond the most obvious sources of risk."  He referred to the view of some, prior to the 2008 credit crisis, who deemed the risks to the markets as being too small to cause much trouble - yet, as we know, the crisis ended up posing systemic-scale problems.

In terms of cybersecurity, he sees the fragmented nature of the U.S. payments industry and its rapid evolution as creating many areas of vulnerability.  "A real financial stability concern, however, is the potential for malicious disruptions to the payments system in the form of broadly targeted cyberattacks."

For further details, go to:  [ Reuters, via CNBC, 11/27/12 ].