Explanation:
Circuit breakers can be a potent macroprudential tool for containing cyber incidents (e.g., stopping the spread of malware or halting panic). However, the primary challenge is deciding exactly when to activate them. If the criteria are not precise, circuit breakers could be triggered prematurely or unnecessarily, severely disrupting market liquidity, exacerbating panic, and causing unintended negative market consequences.
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Q.56 In the context of managing cyber and ICT risks in the financial sector, what is the primary challenge associated with the implementation of circuit breakers as a macroprudential tool?
A
Difficulty in integrating circuit breakers with existing financial software and systems.
B
Establishing precise criteria for activation to avoid unintended market consequences.
C
Ensuring that circuit breakers are compliant with international cybersecurity standards.
D
Training financial staff to effectively manage and respond to circuit breaker activations.
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