US banking regulators have proposed new cyber security standards to protect the financial services industry from cyber attacks and technology failures.

The proposed rules, to be finalised after industry input, have been framed by the Federal Reserve Board, the Federal Deposit Insurance, and the Office of the Comptroller of the Currency.

The rules will cover US and foreign banks operating in the country with assets of $50bn or more, financial market infrastructure companies and nonbank financial companies.

Under the new rules, banks would have to deploy sophisticated controls that will allow them to recover from a cyberattack within two hours.

The rules also require financial providers to develop a cybersecurity risk management plan and include it in their business strategies.

“Covered entities would be required to be capable of operating critical business functions in the face of cyber-attacks and continuously enhance their cyber resilience. In addition, covered entities would be required to establish processes designed to maintain effective situational awareness capabilities to reliably predict, analyze, and respond to changes in the operating environment,” the regulators said.