Next financial crisis may stem from cyberattack or geopolitical shock, RBI governor says

RBI Governor Sanjay Malhotra has warned that the next financial crisis may be caused by a cyberattack, geopolitical shock, or technology failure. This is a departure from the traditional view that the banking system itself is the primary cause of financial crises. The governor emphasized the need for stronger resilience across various sectors, including markets, payments, non-banks, and critical infrastructure, to mitigate the impact of such shocks. This warning highlights the growing importance of cybersecurity and risk management in the financial sector.

Why it matters

The RBI governor is warning of potential triggers for the next financial crisis, which could lead to increased uncertainty and volatility in markets. This warning could lead to a decrease in investor confidence and a shift towards safer assets.

Market impact

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