Good morning. Hacks are on the rise across all industries, but the public sector’s weak protections make it an increasingly attractive target for cybercriminals. Cybercrime has left schools, hospitals and utilities from Baltimore to Los Angeles struggling to pay ransom, restore services and boost security. Finances have suffered, threatening credit ratings.

Local governments are spending big to mop up after hacks and prevent new ones.

• Skyrocketing attacks: The number of K-12 public schools suffering ransomware attacks almost doubled between 2021 and 2022 to almost 2,000 a year, according to a report by Emsisoft, a cybersecurity company. The growing use of technology in education, which was accelerated by the Covid-19 pandemic, as well as healthcare’s reliance on IT infrastructure, has made schools and hospitals particularly vulnerable, according to analysts.
   
• Bolstering security: So far, cyberattacks seem to act as a wake-up call for municipalities, leading to investments in security that reassure bondholders. Researchers at Massachusetts Institute of Technology found that following a ransomware attack, municipalities spent 50% more on technology and bond yields fell by 0.03 percentage point.
   
• Investors in the dark: No protocols govern disclosure about municipal issuers’ relative vulnerability to cyberattacks, ratings firms said. That leaves investors scrambling to keep up. Big incidents, such as the one that crippled Baltimore’s city government computers in 2019, attract notice. Less-prominent attacks don’t always get the same attention.

Montenegro plans to extradite crypto tycoon Do Kwon to U.S.

Montenegro’s top justice official has privately said he plans to send disgraced crypto tycoon Do Kwon to the U.S. rather than South Korea to face criminal charges, people familiar with the matter said.

Kwon—who has been jailed in the Balkan country since March—has been the focus of an international tug-of-war as both the U.S. and South Korea seek his extradition. Prosecutors in both countries want to put Kwon on trial for fraud and securities-law violations in connection with the $40 billion crash of his TerraUSD and Luna cryptocurrencies in May 2022. Kwon is a South Korean citizen. 

State AGs urge feds to force banks to cooperate with probes.

A group of 20 attorneys general, including those for New York, California and Illinois, sent letters to the Office of the Comptroller of the Currency and Consumer Financial Protection Bureau urging the federal agencies to ensure that national banks cooperate with state investigations.

The AGs said banks frequently decline to cooperate with probes of possible misconduct. The OCC declined to comment and the CFPB didn't respond to a request for comment.

• The Canadian government said it would use a cap-and-trade system to impose greenhouse gas emission limits on its oil-and-gas industry, making Canada one of the first major global oil producers to impose emissions limits on its energy industry.
   
• Meta Platforms said it has started fully encrypting messages on Facebook by default, moving ahead with a privacy measure that government officials and others have warned could hide illegal activity by child predators and other criminals.

Xi Jinping and EU officials seek to ease economic tensions.

Chinese leader Xi Jinping and Europe’s top officials sought to ease tensions over trade and economic disputes at their first in-person summit in Beijing on Thursday.

The EU’s relations with China have grown tenser in recent months over the bloc’s trade deficit with China, which doubled to $400 billion in the last two years. Both sides had agreed “that trade should be balanced between the two of us,” said European Commission President Ursula von der Leyen.

• Moody’s Faces Growing Backlash Over Its Negative Outlook on China

FedEx sends safety warning to contractors amid reports of crimes against drivers.

FedEx on Thursday issued a security alert to thousands of its package-delivery contractors, reminding them to give priority to the safety of their drivers and to enhance the security of their vehicles.

In recent weeks, videos have been posted on social media and aired on television showing thieves breaking into trucks or carjacking drivers for FedEx, Amazon.com and United Parcel Service in cities around the country.

• Most of Wall Street thinks inflation has been conquered. There is a lot at stake if they are wrong. Here is a deeper look at the arguments for and against inflation optimism.
   
• The U.S. and U.K. governments jointly accused Russian intelligence of orchestrating a wide-ranging, global hacking campaign over the past eight years.
   
• Though federal prosecutors have alleged there was Indian involvement in a plot to kill a Sikh activist in the U.S., U.S. and Indian officials have signaled that the accusation wouldn’t derail a deepening partnership between the two countries. The two have increasingly looked to each other as a counterweight in a rivalry with China.

• Companies are taking a second look at their nondisclosure provisions as SEC heightens its scrutiny.
   
• The European Union’s coming rules on AI may shape corporate use of AI systems, executives say.
   
• OpenAI’s new board may still confront the same old problem: A nonprofit board overseeing a for-profit business.
   
• Podcasts are turning to visual ads across billboards, streaming platforms and the internet to gain traction.

• Debate performances are fueling Nikki Haley’s rise in the GOP nomination race.
   
• China’s push to reduce its use of fossil fuels and imports of oil and gas has put the country at the forefront of civilian nuclear technology, as climate change is bringing nuclear power back into vogue.
   
• A House panel said it would probe how Harvard University, Massachusetts Institute of Technology and the University of Pennsylvania have handled harassment against Jewish students.
   
• More than 1,100 union workers at DHL’s air cargo hub at the Cincinnati/Northern Kentucky International Airport walked off the job Thursday, a move that affects one of the parcel carrier’s largest logistics facilities during the busiest shipping season of the year.
   
• House and Senate lawmakers agreed to scrap the most contentious pieces of a nearly $900 billion defense and national security policy bill, clearing the way for its passage by the end of the year. This year’s bill, which lays out top policy priorities for the Pentagon, calls for military training assistance to Taiwan.

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