Israel conducted a ten-country simulation of a significant cyberattack on the global financial system on Thursday, in an effort to enhance collaboration that might help limit any possible harm to financial markets and institutions.

The simulated “war game,” as Israel’s Finance Ministry dubbed it and which had been planned for over a year, unfolded over ten days, with crucial material surfacing on the Dark Web. Fake news stories were also employed in the simulation, which produced pandemonium in global markets and a bank run in the scenario.

The simulation included many forms of assaults that disrupted global foreign currency and bond markets, liquidity, data integrity, and transactions between importers and exporters, and was most likely caused by “skilled” actors, according to authorities.

“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.

Such risks are likely, according to Israeli government officials, in the aftermath of several high-profile hacks on huge corporations, and the only way to prevent any harm is through worldwide collaboration, since present cyber protection is not always strong enough.

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

Treasury officials from Israel, the United States, the United Kingdom, the United Arab Emirates, Austria, Switzerland, Germany, Italy, the Netherlands, and Thailand, as well as delegates from the International Monetary Fund, World Bank, and Bank of International Settlements, took part in the “Collective Strength” initiative.

Governments were under strain to justify the consequences of the attack, which was crippling the global financial system, according to the presenter of the video in the simulation.

“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.

Participants talked about international measures to deal with the crisis, such as a coordinated bank holiday, debt repayment grace periods, SWAP/REPO agreements, and coordinated delinking from major currencies.

International coordination between finance ministries and international organisations, according to Rahav Shalom-Revivo, head of Israel’s financial cyber activities, “is vital for the resiliency of the financial eco-system.”

The simulation was initially set for the Dubai World Expo, but owing to the Omicron variation of Covid-19, it was changed to Jerusalem, with authorities participating by video conference.

(Adapted from reuters.com)