Conference Agenda
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Session Overview |
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Session 3.23: Do Lenders Price Firms’ Cybersecurity Risks?
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Do Lenders Price Firms’ Cybersecurity Risks? KU Leuven, Belgium Firms are increasingly exposed to cybersecurity risks. We examine whether lenders recognize and accordingly price firms’ cybersecurity risks. Our findings indicate that lenders on average charge a 4 to 12 basis points higher loan rate when a firm exhibits greater cybersecurity risk over time. Commercial banks tend to adopt a more stringent approach to pricing cybersecurity risks compared to non-bank lenders. Finally, the purchase of cybersecurity insurance by a firm does not mitigate the higher loan spreads associated with elevated cybersecurity risks. | ||