Systemic cyber risk

Establishing an interdisciplinary community of practice

The Challenge

Cyber attacks have the capacity to cause great financial and physical harm to individuals and households, disrupt business operations, and destabilise entire communities. These threats are particularly acute for institutionally-fragile environments with poor penetration of training and education. A first-order concern are large-scale, state-sponsored cyber attacks that can potentially affect entire populations and geographies.

The intervention

Quantitative literature on cyber risk is scarce. What are the determinants of cyber attacks? Which institutions and societies are most likely to be affected? Is risk preventable or insurable? This research offers the first systematic analysis of aggregate implications of firm-level malicious cyber attacks. Its main empirical contribution is a novel time-series index of systemic cyber risk. This can be used in a variety of socioeconomic and finance applications to predict and manage determinants of cyber attacks.

The impact

Cyber security consistently ranks in the top three of the greatest threats to welfare and business, hence proactive management of cyber-attack risk is critical for the preservation and improvement of the standard of living of people worldwide. This is an exciting new research area which aims to establish an interdisciplinary community of practice to proactively track and manage cyber risk and protect citizens from its threat globally.


Ahmed Tahoun, Associate Professor of Accounting, London Business School

Rustam Jamilov, PhD student, Economics, graduating class 2021 at London Business School. Rustam’s research interests include macroeconomics and finance. Rustam’s research was published in the June 2021 edition of The Economist.

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