Moody's is planning to complement its credit ratings business with a rating on risk from cyberattacks. The initiative may help investors who often struggle the potential impact of adverse cybersecurity incidents.
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Moody's is going to start building the risk of a business-ending hack into its credit ratings
That move might be a game-changer for many institutional and individual investors, who often struggle to quantify the potential impact of a significant cybersecurity incident into a meaningful rating. Ratings agencies including Moody's have been warning for years that cyber issues, including lax controls or a meaningful breach, could lead to a downgrade. But this is a first real step toward codifying those predictions. "For us, it's not something we view as a totally new idea," said Derek Vadala, who was named Oct. 17 to a new role heading Moody's Investors Services Cyber Risk Group. "We've been in the risk management business for a very long time. This is to enhance our thinking about credit as cyber becomes more and more important."
