INDUSTRY NEWS ROUND-UP Hackers ahead as cyber crime rises Cyber crime continues to rise because hackers are performing better thansecurity experts, according to Symantec and Verizon. A survey by Symantec revealed that the number of companies attacked by an advanced hacker increased by 40 per cent last year. The internet security firmattributes this to the high-profile successes of cyber criminals such as the Sonyhack that have emboldened them and encouraged others to enter the field. Businesses that sell tools to attack companies have proliferated because of rising demand. This has resulted in the emergence of different tools: ransomware that restricts user access to an infected computer until the criminal is paid off was particularly prevalent last year. Telecoms group Verizons data-breach report found that hackers were getting ahead of security teams by scanning for vulnerabilities in web applications, thenusing the information to make opportunistic attacks. The firm also found that cyber criminals are finding new victims. Although credit card data is still a lure, many now specifically target well-known companies. Risk reforms could squeeze SMEs The British Bankers Association (BBA) has warned that proposed changes to how banks assess risk could slow lending to small businesses. According to reports, the BBA documents suggest small and medium size enterprises (SMEs) are threatened by rules under consideration by the Basel Committee on Banking Supervision, the major source of global standards for the industry. A requirement that banks apply a 300 per cent risk-weight to small business loans is seen as particularly problematic, as it would require them to put aside far more capital. The BBA is concerned that the proposed rules would not have the intended effect of reducing exposure, but would instead disincentivise banks from loaning to safe, established SMEs, while encouraging them to take a punt on riskier start-ups. The association also warned that the rules could reduce mortgage lending for first-time buyers at a time when the UK government is trying to help people get onto the property ladder. ECB head urges caution Mario Draghi, the president of the European Central Bank (ECB), has warned that financial instability and worsening income inequality could result from monetary easing. In a lecture delivered to the International Monetary Fund in Washington DC, he said that the success of policies, including the ECBs quantitative-easing programme, should not cause policy-makers to ignore the problems that could result from rising income disparities and risk taking in the financial markets. This was his first speech covering concerns about the actions of central banks since the financial crisis. Draghi said that programmes designed to keep economies afloat after 2008 could have unforeseen consequences, which should be identified and dealt with. However, he also reaffirmed the ECBs commitment to quantitative easing, stating that the stimulus will continue until economic confidence has been restored. Investors not considering climate change Many investors are failing to consider climate change in their portfolios, according to the Asset Owners Disclosure Project, which monitors investorsexposure in this area. Every year, the non-profit group examines 500 of the largest global investors, ranking them according to their attitude to climate-change risk, using direct feedback and publicly available information. The nine investors that received a totally positive AAA ranking this time aroundhave been judged to go beyond simply showing concern: they are pursuing strategies that mitigate risks, such as divesting themselves of fossil-fuel assets or hedging against extreme weather events. Those investors that are judged to be making no effort at all to address climate-change risk receive a Z rating. Several very large sovereign wealth funds and pension funds were given a Z rating this year. These include the ChinaInvestment Corporation, the Government Pension Investment Fund of Japan, and the pension schemes of ExxonMobil, HSBC, Ford and Tesco. Serious risk vehicle recalls at five-year high Risk of disruption to supply chains at near-record high The risk of disruption to corporate supply chains is almost at a record high, according to the global trade body for purchasing managers. An index supplied by the Chartered Institute of Purchasing and Supply (CIPS) shows that a drop in commodity prices and a slowdown in China have increased the risk to supply chains. The index found that supply-chain risk fell in North America and western Europe during 2014 but rapidly increased in Latin America, eastern Europe, Asia and sub-Saharan Africa. Part of the problem is that vital Chinese manufacturing and heavy-industry sectors are in danger of defaulting on state-backed loans, while Latin American suppliers are suffering because of falls in soya bean and copper prices. The indexs overall risk score has more than tripled since 1994, from 23.7 to 78.7. Recalls of motor vehicles that pose a serious risk to safety are at their highest since 2010, as automotive manufacturers respond to pressure from US regulators. Research conducted by law firm Pinsent Masons (PM) found that there were 195 recalls issued last year more than at any point in the past five years. The increase is most marked in Germany, where 90 cases of unsafe vehicle models were identified a significant rise from three in 2010. The UK had 27 notifications for vehicle recalls in the same period. PM says the study highlights the increasing pressure on manufacturers to be proactive in dealing with vehicle problems. This has been sparked by recent events in the US, which included a record US$70m fine being imposed on Honda for inadequate reporting of fatalities, injuries and warranty claims. The firm was questioned about 1,700 unreported death or injury claims, and has recalled more than five million vehicles in the US since 2008 as a result of faulty air bags. PMs research notes that manufacturers will be working harder to mitigate the volume of product recalls this year, but that challenges will be caused by the increasing complexity of modern cars.