The alleged hack represents yet another PR nightmare for the IMF, which saw its managing director, Dominique Strauss-Kahn, resign last month after being accused of sexually assaulting a New York City maid.

Several unnamed sources close to the situation told the Times that the cyber attack was very serious in nature, although they did not provide any specifics.

“This was a very major breach,” one official told the paper, adding that it had been taking place over the last few months.

IMF spokesman David Hawley kept his cards close to the vest, telling the Times that the organization is investigating “an incident” and the fund is “fully functional.” The attack was disclosed to the IMF’s staff and board of directors on Wednesday, but has not been announced publicly.

As the manager of financial data on economically-troubled nations, the IMF has access to highly confidential and potentially “market-moving” information, says the paper.

One senior official referred to the data being held by the IMF as “political dynamite in many countries.”

Reports of the attack have already spooked at least one IMF collaborator. The World Bank has acknowledged that it has cut a computer link that enables the two organizations to conduct meetings and share some non-sensitive data, according to a bank official.

The move represented “an abundance of caution” on the part of the World Bank, which doesn’t yet know the scale of the attack, the official told the Times.

Computer hackers have flexed their muscle in recent months, compromising confidential information at defense contractors, electronics firms and Internet giants. The IMF breach comes on the heels of a “significant and tenacious attack“ of Lockheed Martin’s (News - Alert) network.

Meanwhile, Sony has spent the better part of the year responding to a myriad of embarrassing security breaches to its PlayStation Network and company websites.

“Clearly we are losing the battle,” Vijay Mukhi, one of India’s leading cyber security experts, told Reuters. “We are not doing enough... every year we hope things will change but now people like me have turned cynical. It requires co-operation on a global scale.”

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Beecher Tuttle is a TMCnet contributor. He has extensive experience writing and editing for print publications and online news websites. He has specialized in a variety of industries, including health care technology, politics and education. To read more of his articles, please visit his columnist page.

Edited by Jennifer Russell