Cyberattacks in the Municipal Bond Market

Cyberattacks pose a hidden risk in the municipal bond market, with local governments being targeted for ransom demands and service disruptions. The public sector's weak protections make it an attractive target for cybercriminals. Municipalities are investing heavily in cybersecurity to prevent and recover from cyberattacks, reassuring bondholders. Cybersecurity incidents are attracting attention, but less-prominent attacks may not receive the same scrutiny. The Securities and Exchange Commission (SEC) has mandated companies to report cyberattacks, and rating agencies are asking local governments to disclose their cybersecurity protections. While cyber insurance is available, its high costs may hinder small government agencies. Job retention in information-technology departments could be challenging due to competition with the private sector.