A cyber attack affecting any of the five most active US banks could lead to significant liquidity shortages in the US financial system, warns a paper published by the Federal Reserve Bank of New York.

Assuming a large bank under attack halts any outgoing payments, many other banks in the system would fall short of their normal reserve levels, the paper argues, which could prompt hoarding behaviour and seize up the interbank payments market. 

The impact would affect more than one-third of bank