CYBERSECURITY BREACHES AND THEIR MACROECONOMIC IMPACT ON FINANCIAL MARKETS

Cyberattacks are now typical high-impact events that can propagate through financial markets and the whole economy. This article combines existing research on event‐study analyses of cyberattacks, with focus that firms that suffer publicly disclosed breaches typically suffer short‐term negative abnormal returns and volatility spikes. We also address macroprudential issues: the authorities and the evidence find that central digital interdependencies may amplify a serious breach into systemic instability. With a conceptual event-study design (Figure 1), we outline the way in which researchers test abnormal returns during event windows. We examine evidence of cyber risk and regulatory reform reaction in the marketplace (e.g., the EU NIS Directive and emerging SEC disclosure regulations). Two case narratives (SolarWinds, Dec 2020 and Colonial Pipeline, May 2021) report breach events, market reactions, and policy implications. The results show that while flamboyant cyber incidents dent firm prices and potentially induce cross-sector spillovers, robust disclosure and resiliency policies are necessary to mitigate systemic vulnerabilities. The article concludes with implications for financial stability, investor sentiment, and recommendations for future research in cyber risk in macro-finance.