Israel on Thursday led a 10-country simulation of a major cyber attack on the global financial system in an attempt to increase cooperation that could help to minimize any potential damage to financial markets and banks.

The simulated cyber attack evolved over 10 days, with sensitive data emerging on the Dark Web along with fake news reports that ultimately caused chaos in global markets and a run on banks.

The simulation featured several types of attacks that impacted global foreign exchange and bond markets, liquidity, integrity of data and transactions between importers and exporters.

"These events are creating havoc in the financial markets," said a narrator of a film shown to the participants as part of the simulation and seen by Reuters.

Israeli government officials said that such threats are possible in the wake of the many high profile cyber attacks on large companies, and that the only way to contain any damage is through global cooperation since current cyber security is not always strong enough.

'Attackers 10 Steps Ahead'

"Attackers are 10 steps ahead of the defender," Micha Weis, financial cyber manager at Israel's Finance Ministry, told Reuters.

Participants in the initiative, called "Collective Strength," included treasury officials from Israel, the United States, the UK, United Arab Emirates, Austria, Switzerland, Germany, Italy, the Netherlands and Thailand, as well as representatives from the International Monetary Fund, World Bank and Bank of International Settlements.

The narrator of the film in the simulation said governments were under pressure to clarify the impact of the attack, which was paralyzing the global financial system.

"The banks are appealing for emergency liquidity assistance in a multitude of currencies to put a halt to the chaos as counterparties withdraw their funds and limit access to liquidity leaving the banks in disarray and ruin," the narrator said.

The participants discussed multilateral policies to respond to the crisis, including a coordinated bank holiday, debt repayment grace periods, SWAP/REPO agreements and coordinated delinking from major currencies.

Rahav Shalom-Revivo, another Israeli financial cyber official, said such a wide-ranging attack on the global financial system would need to be done by sophisticated attackers.

The simulation was originally scheduled to take place at the Dubai World Expo but it was moved to Jerusalem due to the Omicron variant of COVID-19, with officials participating over video conference.

Some of the participants said in a real cyber attack situation governments would take action more quickly than in the simulation.

One European financial official said that in the case of such of an attack, his country would not wait 10 days to act.

"As soon as the supply of money were hampered, at least in the European Union, we would probably have an emergency meeting on the same day," he said, adding that he would immediately reach out to counterparts across Europe and the United States.