Global stability threats and systemic risks in post-trade were in focus for an afternoon scare in the first-day programme of the World Forum of CSDs in Prague on Wednesday. The six-expert panel included Oleksii Yudin, chairman of Ukraine’s CSD, NDU.

Are the world’s financial market infrastructures up for their fundamental job: standing up against any crisis that could cause a systemic collapse? The panel tackling this question as its first one consisted of …
Jim Micklethwaite (Moderator), Director, Head of Operations, Thomas Murray Ltd,
Pierre Paul Stacanov, Chief Risk Officer, ESES Euroclear Group,
Ekrem Arikan, Chief Executive Officer, Board Member, MKK (Turkey’s CSD),
Oleksii Yudin, Chairman, National Depository of Ukraine (NDU),
Pheona Härtel, Head of Legal, Risk and Compliance, Strate (South Africa’s CSD), and
Adrien Vanderlinden, Executive Director, Systemic Risk Office, DTCC.

Cyber attacks tops list – by far

The audience of CSD professionals (and some participant representatives) were polled on how deep CSDs should go into the management of risks in the market. The arguments for playing a central role in regulation, rather than a hands-off one, include the fact that they are neutral to the participants and that they naturally have access to a lot of information that other regulators don’t have.

About two thirds, of the 50-or-so respondents to the poll question, filed “Cyber attack” as a potential cause of system risk that most concern them in their market. The question allowed multiple responses, but the second-spot alternative scored only about half as high: “Technology breakdown”, with “Market infrastructure breakdown” and “Participant default” following soon after.

The war put several risks in new light

Oleksii Yudin could describe his experience of being subjected to massive cyberattacks in connection with Russia’s war on Ukraine. Paradoxically, those attacks have not been very successful at all so far. Combined with the threat of the traditional war, however, the integrity of the CSD systems remains a major concern. Also, the war led to an updated view on cloud infrastructure; with missiles falling from the sky, a cloud architecture was considered safer rather than the traditional data-center setup.

Preparing for the war was difficult because war is not a predictable thing. Is it regional outside the CSD’s region? Or is the CSD captured with the country as a whole? In some scenarios, the right thing to do could be to simply pull the plug on all trade settlement, to ensure that assets don’t change hands illegitimately.

The panel followed after a case study, from Georgia, on how a centralised multi-entity CSD solution can be designed to serve an entire capital market – and was followed by closing remarks by the Czech Republic’s Minister of Finance Zbyněk Stanjura.  


• The World Forum of Central Securities Depositories runs in Prague 24–26 May 2023. Our coverage of it is listed here.

(Our posts will be low on direct quotes, as the event welcomes journalists on the condition that such must be explicitly confirmed with each speaker, which adds an operational hurdle.)