Government credit risk associated with election risk.
N2K logoOct 7, 2022

Moody’s Investors Service has released a report detailing the government’s credit risk and implications during election season.

Government credit risk associated with election risk.

Moody’s Investors Service released a report detailing election risks as they relate to cyber risk. The service discusses how local governments are more exposed to credit risks as there is a shift from core services to election security, and calls on state and federal funding to mitigate risk.

Discussion of risk.

National security officials are preparing for increased risk of cyberattacks and influence from outside actors, foreign and domestic, that look to erode confidence in election infrastructure in the US. Election interference can cause hindrances in policymaking, as focuses can be on political and social tensions, and disrupting institutions’ stability. Differences in voting technologies across the country, as there’s no central election management system, change and affect cyber risk and exposure. Wide-scale interference at the federal level won’t happen due to a lack of centralized election management, but local and state governments remain the focus of risk.

Election-related cyberattacks would also be bad for local governments as well, because that would require a shift from costs only allotted to operate the elections, and not for a whole cyber response, so that would be a negative financial move.

Risk mitigation.

Moody’s recommends involvement from federal and state governments to mitigate the risk to local governments. Initiatives at the federal level, along with an increase in funding, would help mitigate cyber risks. State-run and nongovernmental groups are also encouraged to target cybersecurity and misinformation, in order to help mitigate election risks with the public.

What the Feds said about election security earlier this week.

CISA and the FBI have issued a moderately encouraging appreciation of the threat to US elections in which they conclude that direct attacks on the vote itself are unlikely to succeed. That is, it seems that the actual recording and counting of ballots are probably fairly well secured. Other risks, of course, particularly foreign influence operations, remain.