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Warnings on U.S. Financial Security Issued by NY Lawmaker after SWIFT Attacks

Warnings on U.S. Financial Security Issued by NY Lawmaker after SWIFT Attacks
US’s top banking regulators have been asked to note that the recent hacks of international banks through the SWIFT messaging system raise serious questions about cyber-related risks to U.S. firms by the Representative Carolyn Maloney in a letter that Maloney wrote on Monday regulators who had asked about measures to strengthen systems' security.
Maloney said that she remains "deeply concerned about U.S. banks' exposure to these new, sophisticated cyber attacks".  She represents the part of Manhattan - home to many people employed in finance and banking and a Democrat wrote to Federal Reserve Chair Janet Yellen, U.S. Comptroller Thomas Curry and Federal Deposit Insurance Corporation Chairman Martin Gruenberg stating her views kn the SWIFT hacking issue that has rocked the banking industry following the hacking of the Bangladesh’s central Bank’s SWIFT code to steal $81 million.
Considered to be the backbone of international banking, the SWIFT network allows banks to process billions of dollars in transfers each day. However its security code and messages were used by hackers in February to decamp with $81 million from the Bangladesh central bank.
Since then the Belgium-based cooperative that runs the network is pressing member banks to share information about attacks as other thefts and acts of fraud have come to light.
Both Wells Fargo and Banco del Austro in Ecuador believe that they were duped of $12 million that was transferred from the Ecuador bank last year. Last year Reuters had reported that the former had confirmed the transfers from the latter bank after receiving requests through the secure messaging system. The hackers and the money are yet to be identified.
What steps the had taken, or will take, "to ensure that all U.S. banks have adequate security measures in place to protect against cyber attacks that involve stolen SWIFT credentials", was asked by Maloney to the regulators. Maloney is the senior Democrat on a House subcommittee on capital markets.
She also wanted to know whether the agencies had ordered U.S. banks to conduct a cyber security review along the lines of the review ordered by the Bank of England and how they would ensure that U.S. "members of SWIFT are in full compliance with SWIFT's recommended security practices and policies".
"In addition, I believe that your agencies can play an important leadership role in the international response to these cyber attacks," she wrote.
However questions about how U.S. regulators are responding to the threats emerging through the SWIFT system have been raised before Maloney also. SWIFT and the Federal Reserve Bank of New York were asked last week about how they were bolstering security in the wake of the Bangladesh heist by Senator Tom Carper of Delaware who is also a Democrat.
According to prepared remarks by the chief executive officer of Swift, the global interbank messaging system is set to give on Tuesday, hackers may have targeted more banks than have been previously reported.
According to prepared remarks of the speech, which is slated to be delivered Tuesday, the network’s chief executive officer, Gottfried Leibbrandt, will tell an audience at the European Financial Services Conference in Brussels about how the Society for Worldwide Interbank Financial Telecommunication will increase security requirements for the software clients use and help clients conduct security audits.
"The Bangladesh fraud is not an isolated incident: we are aware of at least two, but possibly more, other cases where fraudsters used the same modus operandi, albeit without the spectacular amounts. The banks were compromised, credentials to payment generation systems were obtained to send fraudulent payments and the statements/confirmations from their counterparties were obfuscated," according to the speech.
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Christopher J. Mitchell

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