Enhancing Cyber Risk Management with the Framework of ERM and Basel II

Enhancing Cyber Risk Management with the Framework of ERM and Basel II

Junji Hiwatashi (Bank of Japan, Japan)
DOI: 10.4018/978-1-59904-828-4.ch002
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Abstract

Information technology (IT) has been rapidly developed to provide financial services for customers via the Internet. This service is available 24 hours a day, 7 days a week across borders. On the other hand, technology-oriented financial services may face various cyber risks such as disruption caused by natural disasters and terrorist attacks, impersonation and other events stemming from unauthorized access, and theft or alteration of data. Once these events occur, they can affect not only companies such as financial institutions but also their stakeholders (e.g. customers) and financial stability. These events lead to indirect effects such as lawsuits and a bad reputation losing a sound customer base immediately. Thus, it is critical to enhance cyber risk management in advance before the nightmare happens, in order to enjoy the benefits of IT. This chapter introduces practical methods of enhancing cyber risk management efficiently and effectively with the framework of Enterprise Risk Management (ERM) and Basel Accord II (Basel II). It aims to show how to enhance cyber risk management, as well as efficiency, so that sustainable growth is achieved with a balance between risk and return or risk-adjusted return on equity.

Complete Chapter List

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Table of Contents
Foreword
Yoshiaki Nomura
Preface
Takashi Kubota
Acknowledgment
Chapter 1
Pauline C. Reich
While the benefits of the Internet and other forms of computer networks are streamlining financial institutions, the same institutions are often... Sample PDF
Cybercrime, Cybersecurity, and Financial Institutions Worldwide
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Chapter 2
Junji Hiwatashi
Information technology (IT) has been rapidly developed to provide financial services for customers via the Internet. This service is available 24... Sample PDF
Enhancing Cyber Risk Management with the Framework of ERM and Basel II
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Chapter 3
Takashi Kubota
Unlike the UK, Germany, France and some major countries that permit entries from banking to commerce and vice versa (“two-way” regulation), the... Sample PDF
IT Development and the Separation of Banking and Commerce: Comparative Perspectives of the U.S. and Japan
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Chapter 4
Motoaki Tazawa
In order to improve convenience for investors through competition among stock exchanges, operation of Proprietary Trading Systems (PTS) was... Sample PDF
Laws and Regulations on Proprietary Trading System (PTS) in Japan: Japanese Alternative Trading System (ATS)
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Chapter 5
Tomonori Fujiike
This chapter compares account-based securities settlement systems with payment systems in which funds are transferred through bank accounts in... Sample PDF
The Holding and Transfer of Interests in Securities in England and Japan: Compared with the Holding and Transfer of Funds
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Chapter 6
Masaaki Nakajima
This chapter investigates the evolutionary process of the payment system against the background of structural changes. At the early stage, most... Sample PDF
Global Trends of Payment Systems and the Next-Generation RTGS Project in Japan
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Chapter 7
Fernando Barrio
Well into the first decade of the twenty-first century, it is fair to say that card payments are the cyberspace payment method by definition and... Sample PDF
Technical and Legal Concerns about Global Card Payments
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Chapter 8
Takashi Nakazaki
In this article, after surveying existing Japanese public laws that regulate the transfer of funds via the Internet, and focusing on electronic... Sample PDF
The Regulation of New Forms of Electronic Fund Transfers in Japan Focusing on Electronic Money
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Chapter 9
Evelyn Lim Meow Hoong
Financial innovations bring new challenges and new risks besides advantages to the world of finance in cyberspace and in the real world. These... Sample PDF
Commodity Based Digital Currency: A Legal Analysis
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Chapter 10
Masao Yanaga
Some courts have recently ruled in Japan with regard to mistakes in remittance to account. While the Supreme Court held that the recipient has... Sample PDF
Mistakes in Remittance to Account
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Chapter 11
Sam Edwards
This chapter is designed to address the primary difficulties small and medium enterprises face when doing business online with international... Sample PDF
Doing International Business Online for the Small and Medium Enterprise
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Chapter 12
Shino Uenuma
Due to the development of the Internet, global e-commerce markets are growing greatly. From the viewpoint of consumers, cross-border transactions... Sample PDF
Consumer Protection in Cross-Border E-Commerce Markets
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Chapter 13
Jibitesh Mishra, Biswajit Tripathy
The usage of cyber contracts has increased exponentially in the recent times. However, the framework for this has not been clearly defined. The... Sample PDF
Cyber Contract and Indian Law
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Chapter 14
Naoshi Takasugi
When a dispute arises from e-commerce involving parties located in different nations, the parties immediately face conflict-of-laws issues such as... Sample PDF
E-Commerce and Dispute Resolution: Jurisdiction and Applicable Law in a Dispute Arising from a Computer Information Transaction
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Chapter 15
Takeshi Kawana
The purpose of this chapter is to examine international jurisdiction and choice of law for e-commerce involving economic legal issues. International... Sample PDF
Cross-Border Court Jurisdiction and Economic Law Application in Electronic Commerce
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About the Contributors