Thursday, September 22, 2005

How It's Difficult to Ruin a Good Name: An Analysis of Reputational Risk

To what extent is (or isn't) investor confidence shaken? In other words, why is it the case that information security incidents do not appear to have a greater impact on both investor confidence as well as the public at large? To phrase the question in financial terms: why isn't the top line effected more than it is? To poignantly highlight this phenomena we ask: If 40 million customer credit card numbers are exposed in a security breach at the credit card processor CardSystems , why do a significant number people not cancel their Visa and/or Mastercard?