Waiting for the Dog to Bark
March 28, 2022·2 comments·In Brief
Five years ago, Russia demonstrated it could destroy a country's financial infrastructure in hours. Hospitals went dark. Banks locked their doors. Ten percent of all computers simply ceased to exist. When Russia invaded Ukraine last month, everyone expected it would happen again. Bigger strikes. More coordinated attacks. Across multiple countries. It didn't. The attack nobody anticipated was the one that didn't come.
• The 2017 NotPetya attack established the template for how devastating cyberwarfare could be. Spreading through a routine software update, it wiped entire data centers in hours, destroyed hospitals and banks across Ukraine, and caused over $10 billion in damage. That precedent has dominated regulatory thinking about systemic financial risk for five years.
• For five years, regulators elevated cyber to their most urgent systemic threat. The Federal Reserve modeled what happens if attackers successfully disrupt major banks' payment systems and found a single strike could interrupt between 5% and 35% of daily payment flows—equivalent to one to eleven times daily GDP. That was their baseline fear.
• When Russia invaded Ukraine, the conditions for a major cyberattack seemed perfectly aligned. Financial institutions operate hundreds of thousands of interconnected devices. A paralysis would cascade across borders instantly. Economic disruption would compound military chaos. Russia had proven capability, clear motivation, and immediate opportunity.
• The anticipated cyberattacks barely materialized. Banks went offline briefly then restored service. Government systems hiccupped without collapsing. A month into the invasion, Ukraine's cellular networks and banking infrastructure still functioned. The feared digital cataclysm never arrived.
• The real question isn't whether cyberattacks could still come. It's why the strike everyone expected didn't happen when every condition aligned. That gap between expectation and reality might reveal something fundamental about how we're measuring or whether we're understanding these threats correctly.
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Comments
The historical analogue for cyberwarfare is piracy. Each can be used for simple criminal ends or as an extension of foreign policy (warfare). The U.S. stopped being a victim of piracy when it re-constituted the Navy and sailed to the Barbary Coast & Algiers and started breaking their toys. Similarly, it’s long past time for the US to take the fight to the enemy in the context of cybercrime and cyberwarfare. Overspeeding Iran’s centrifuges was useful example, but come on… There are DAILY black-hat cybercrimes happening at scale and causing enormous damage. The pirates and their foreign state sponsors are literally laughing all the way to the bank. You can’t expect them to cease unless & until we change that calculus by raising the cost of violating our sovereignty.
I thought this was a really good article, but it implied a question and unfortunately did not answer it. I have been watching and waiting for this dog (Cyber) to bark as well. Why has it not barked? We constantly have heard over the past 6 years about “Russian Hackers!” TM. I would have expected Russia to punch back in a similar non-kinetic way by now. Particularly the US attacks have affected the Russian finance and banking sectors the most so I would assume that’s where they would want to punch us back. I would think it would be particularly low hanging fruit in the narrative battle. So I’m really curious why this dog has not yet barked.
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