Conference Agenda

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.