Thurs. PM TNT News Articles 12-9-21



EXCLUSIVE IMF, 10 countries simulate cyber attack on global financial system | Reuters


Israel on Thursday led a 10-country simulation of a major cyber attack on the global financial system in an attempt to increase cooperation that could help to minimise any potential damage to financial markets and banks.

The simulated cyber attack evolved over 10 days, with sensitive data emerging on the Dark Web along with fake news reports that ultimately caused chaos in global markets and a run on banks.

The simulation featured several types of attacks that impacted global foreign exchange and bond markets, liquidity, integrity of data and transactions between importers and exporters.

“These events are creating havoc in the financial markets,” said a narrator of a film shown to the participants as part of the simulation and seen by Reuters.

Israeli government officials said that such threats are possible in the wake of the many high profile cyber attacks on large companies, and that the only way to contain any damage is through global cooperation since current cyber security is not always strong enough.

“Attackers are 10 steps ahead of the defender,” Micha Weis, financial cyber manager at Israel’s Finance Ministry, told Reuters.

Participants in the initiative, called “Collective Strength”, included treasury officials from Israel, the United States, the UK, United Arab Emirates, Austria, Switzerland, Germany, Italy, the Netherlands and Thailand, as well as representatives from the International Monetary Fund, World Bank and Bank of International Settlements.

The narrator of the film in the simulation said governments were under pressure to clarify the impact of the attack, which was paralysing the global financial system.

“The banks are appealing for emergency liquidity assistance in a multitude of currencies to put a halt to the chaos as counterparties withdraw their funds and limit access to liquidity leaving the banks in disarray and ruin,” the narrator said.

The participants discussed multilateral policies to respond to the crisis, including a coordinated bank holiday, debt repayment grace periods, SWAP/REPO agreements and coordinated delinking from major currencies.

Rahav Shalom-Revivo, another Israeli financial cyber official, said such a wide-ranging attack on the global financial system would need to be done by sophisticated attackers.

The simulation was originally scheduled to take place at the Dubai World Expo but it was moved to Jerusalem due to the Omicron variant of COVID-19, with officials participating over video conference.

Some of the participants said in a real cyber attack situation governments would take action more quickly than in the simulation.

One European financial official said that in the case of such of an attack, his country would not wait 10 days to act.

“As soon as the supply of money were hampered, at least in the European Union, we would probably have an emergency meeting on the same day,” he said, adding that he would immediately reach out to counterparts across Europe and the United States.

interesting timing don’t ya think?

Zimbabwe: ‘Bring Back the U.S.Dollar’ – Business Tells Mnangagwa | (12/9/21)

President Emmerson Mnangagwa, Finance Minister Mthuli Ncube, and the Presidential Advisory Committee (PAC) have been advised by the business community to seriously consider bringing back the US dollar into circulation, and rescue the collapsing economy.

Leaders from the business sector were Tuesday invited to a PAC meeting at State House chaired by Mnangagwa.

The business community was represented by senior executives from Old Mutual and other blue-chip companies.

However, during the meeting, the business delegation openly told Mnangagwa and Ncube that the fluctuating foreign exchange rates were weighing heavily on the country’s prospects for economic growth.

“From our perspective, we believe there is enough foreign currency to go along. It is all about confidence, how we make people believe that there is enough forex to go around, how to instill the confidence and how you actually make it to go around,” one of the business executives only identified as Skonken, told Mnangagwa and his ministers present.

In our opinion, perhaps we need an open, formal, commercial foreign exchange market that everyone can enter and transact. In creating the market, I believe it is critical not to try to set or control the rate of exchange. Let the market do that.”

The Finance Minister has remained adamant that the Zimbabwe government would not re-dollarise the economy despite continued calls by the business community, civil servants, and ordinary citizens.

The government was forced to pay civil servants their 2021 13th cheque in US dollars, after the public workers had threatened to roll out massive protests if their demands were not met.

The Zimbabwean dollar, brought back upon the scrapping of the US in 2018, has been losing value. It is now trading at over US$1: $200 on the black market while the official rate is at $1: $110.

Currency Volatility Surges Ahead of Big Week for Central Banks | Bloomberg


Currency traders are taking no chances when it comes to next week’s policy decisions by the world’s major central banks.

One-week volatility for euro and sterling has risen to multi-month highs, with meetings by the Federal Reserve, the European Central Bank and the Bank of England in focus. Currency hedging costs were already elevated as investors assess the risks from the omicron variant and whether existing vaccines prevent infections.

The following charts  (click on link) show that it’s monetary policy dynamics that will be the main driver of currency moves into the Christmas holidays.

One-week volatility in the euro rose Thursday by as much as 238 basis points to touch 8.89%, a level unseen since December 2020. In comparison, the year-to-date average of the gauge stands at just 5.53%.

Traders expect the Fed to announce a faster pace of tapering and their updated dot plot next week, and are awaiting guidance by ECB officials on their plans for the end of the Pandemic Emergency Purchase Programme and the expansion of the Asset Purchase Programme.

The importance of updated guidance can be seen in the euro’s inverted volatility term structure with the one-month, one-week spread falling short only of risk events like the U.S. elections and the March 2020 market mayhem.

Source: Dinar Recaps


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