The largest lender globally in terms of assets, the Industrial and Commercial Bank of China (ICBC), was hit by a ransomware attack that disrupted the trading of Treasury securities through its US financial services division. The cyberattack, which resulted in system disruptions, was disclosed by ICBC on Thursday. Promptly implementing system isolation as a preventive measure, the financial institution is currently working with information security experts on recovery efforts after launching a thorough investigation. Despite the attack, ICBC affirmed the successful clearance of US Treasury trades executed on Wednesday and repo financing transactions conducted on Thursday. The US Financial Industry Regulatory Authority (FINRA) and other government entities are investigating the impact of the ransomware attack on firms and consumers.
Trades that traversed ICBC reportedly encountered settlement difficulties, potentially affecting market liquidity and the performance of a 30-year bond auction. Market participants found it challenging to evaluate the attack’s complete magnitude, especially considering the decline in bond market value due to remarks made by Federal Reserve Chair Jerome Powell. Despite ICBC’s assurance regarding the affected transactions being successfully cleared, market liquidity remained a concern in the aftermath, potentially impacting inter-dealer broker volumes and auction outcomes.
ICBC’s Hong Kong-listed shares closed with a decrease, while its Shanghai-traded shares closed unchanged. China’s substantial presence in the international Treasury market is evident by recent data revealing Treasury securities worth $805.4 billion as of August. Ransomware attacks, such as the one encountered by ICBC, have emerged as a matter of international significance, affecting businesses and public services and raising national and economic security concerns.
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