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Federal Reserve To Use Internet For Money Transfer
An anonymous reader writes "According to the New York Post, the Federal Reserve (i.e. Alan Greenspan and Co.) is going to change the way that it transfers money between banks so that transfers now take place over the internet instead of via a private banking network. They aren't specifying the types of security measures that will be used (security through obscurity?) Am I the only one who thinks that this is a very bad idea? Might a DDOS attack on the Fed's computers bring down the entire banking system?" The banks have put some thought into security.
First transaction
VPN and PGP encrypt. That's over the internet, but pretty damn secure - I work in the healthcare industry and PGP is pretty standard, usually over a VPN or secure FTP.
I've read that the Fed is a privately owned, for-profit bank that creates "money" by issuing loans to other banks. Oh, and the interest charged on the loans must be paid for in "money" that can only be created by issuing more loans.
Can someone shed some light on this?
Shocking. To think they'd use the INTERNET instead of analog phone lines!
No need to have a really secure VPN. Just use ROT-13 and use the DMCA to crack down hard on anyone who cracks it.
what makes you think "using the internet" equates to "having a server completely open to the public with no backup processes"? in the UK you can do your taxes online, I guess if they get DDOS'd no one will have to pay?
The military already uses the Internet for their stuff. It's largely disconnected from the public Internet, so denial-of-service attacks can't reach the important stuff.
Why shouldn't the banking industry uses industry-standard equipment and protocols? I'm sure that you can buy a lot of redundant routers at Frys for the price of one of their private-network routers.
I have to believe that -- if strong accounting controls are built in -- the proposal would be a step in the right direction. A DOS attack slows transfers, which pretty much puts us back to where we are now. The bigger risk is someone illegally diverting funds to an account -- and spending the money before they are caught. Preventing that from happening is the point of maintaining strict access standards and a clear audit trail.
you are so cool
I've patented the process of Sperm Banking over the internet.
I'm more worried about another slammer-type attack that floods the Internet.
:)
Besides, encryption and such are fine, but just keeping everyone else off your network (the old method) makes the security model much simpler.
The more access there is, the more possible attacks there are. Which means that more attention has to be spent testing and checking these systems.
Which means more jobs! So it isn't all bad.
"You've got money!"
"He who throws mud, loses ground." - proverb
I know that the US Government owns many class A ip ranges, and that some of these they do not route traffic in/out from. Basically, the US Military has a "public" private network. I would image that the same type of measure could me taken here. It would be fairly easy to firewall this at various points if the ip classes are huge.
Great ideas often receive violent opposition from mediocre minds. - Albert Einstein
...wouldn't that make him Alan Greenspam?
Wonder how long it will be until they see:
Transaction complete.
Confirmation: All your bank accounts belong to us!
nos laetus epulor qui would domito nos
Well, they have DOS systems connected to a private network.
The weird thing is that they're looking at moving to the Internet to get away from the limitations of their DOS system.
Why don't they keep the current, private network and just upgrade the machines and the software on that? Why do the upgrade AND move to a less secure network?
The biggest concern isn't the 13-year-old who hacks into the Fedwire and sends himself some money -- it's terrorism.
Gee, a terrorist is a bigger threat than a script kiddie, who'd have thought?
Slashdot "libertarians": Small government for me, big government for those I disagree with. -1, I disagree with you
There just seems to be no good reason to do this. They claim that they're doing this to get rid of their DOS-based system. The application has nothing to do with the network transport mechanism. They could just as easily re-write the existing application to use private lines as they could to use the Internet. This project was apparently driven by the vice president of national marekting at the Fed. Why does this position even exist? Does the Fed have any competitors at all? For those of you that have never worked in Government IT, there is only one thing you need to know. Write this down, because you may need it one day: Government IT does eveything the stupidest way imaginable.
A privately-held and privately-run corporation, governing America's own financial system ... it needs to be un-done, people.
Get rid of the Fed (and let the government control its money again), and you'll find yourself, suddenly, with a lot of happy Americans, and a lot less animosity towards Americans, around the world.
And a lot fewer wars too.
Seriously, Americans. You've been gypped! Do something about it!
Why is "Laura Hughes, vice president of national marketing" in charge instead of computer experts?
Some people die at 25 and aren't buried until 75. -Benjamin Franklin
Im sure that the internet is far more redundant than any private network that these banks use now. Im sure these banks dont have as many routes from node to node as the internet does, its not feasible in a private company. But say if one node in the banking system via the internet goes down, traffic can be routed around it.
(Formerly known as PayPal)
... even script kiddiez know better than to go after a .gov or .mil address. That's just plain stupid, there's not enough reward.
However there are elements out there which are as proficient at their trade as you fear. Remember the network breaches at the CIA a whileback? For the banking system, the rewards might be large enough for them to risk something.
... uh, never mind. There's a couple of suits at the door waving badges ...*
*It's a joke. No, really, it's a joke. Hey, motherfucka, I SAID it's just a freaking JOKE! Ouch. Take these damn cuffs off me you "mffff"...
I can practically see Usama rubbing his hands together...
Just as an example, the computer that the data is being sent to has to be connected to the Internet. How secure is this computer from attacks? If someone breaks into that computer, can they get to the unencrypted data?
Dlugar
Computer Go: Writing Software to Play the Ancient Game of Go
All this money is wired around and such but where do the actual money shipments take place. I mean eventually you would think that these guys would have to settle somewhere in hard currency or at the point you have to use this system you just settle it all via numbers on the internet. But that's even more confusing because the hard currency is still in the banks. It makes no sense.
Suppose they have their own, private network. It would need wires running all around the country. Nobody could DoS it from the Internet, but if someone tried to take it down, all they would have to do is cut a few wires!
Now suppose they do it over the Internet. Someone DoSs a major backbone. I can't check my email, but the Fed has a lot of HIGHLY payed engineers rerouting their traffice over a satelite connection, or over a bunch of long-distance dial-ups to route around the busted backbone. In fact, they will probably have this infractructure in place long before a backbone is DoSd.
And confidentiality is not a problem. The Fed can exchange keys via armored trucks.
A slashdotter who didn't build his own computer is like a Jedi who didn't build his own lightsaber.
The power of the printing press used by the reserve to deflate the dollar comes home with the Federal Reserve's new eBucks program. With eBucks, users with inkjets and laser printers can now order and print currency WITH NO GOLD TO BACK UP ITS VALUE Just like the big boys!
Do not try to transfer the money online. That's impossible. Instead only try to realize the truth. There is no money online. Then you'll see that it is not the money you transfer online, it is only yourself.
Let's not forget that one can hate his government, but love his country.
From the deep memory:
Disclaimer: This is OLD stuff and might be different today. But, banks are stodgy and don't like to change things that work.
Most banks don't use the Fed wire for transfers all day long. They use private networks, like SWIFT to conduct their business. c.f Swift money transfer
Back in the days before the internet, SWIFT used to require that you had an office in lower Manhatten (e.g. Wall Street) with a HIGH RANKING bank officer there. If something went wrong (and you stopped processing transfers for some reason), the SWIFT officers could meet and discuss the issue with you. They might float your bank for the day, keeping you from going under if it was something like broken computer equipment and not an insolvency issue.
Computers and networks got much better, and with SWIFT's desire to be truly global, that's no longer required.
So, what happens is that the banks all over the world do millions of transactions all day long on the SWIFT network, and no money really moves, it's just a bunch of credits and debits. Then, at an agreed upon time, they "fess up" and pay their outstanding balance (or get paid) on the Fed wire (or others methods in other countries).
SWIFT also provides the banks with a general message service like sending a TELEX.
My money going into a shoe box with my election ballots.
Part of this, I believe, is the result of the 9-11 attacks in the US. While the planes were grounded, the banking system couldn't move checks the old fashioned way (by jet), and this is designed to prevent that again. Heard something about Check 21 or something where banks are to avoid moving the actual checks/images.
http://econpapers.hhs.se/paper/wpawuwpma/0203005.h tm
Goddamn MTV-generation.
None of this "Funds will be available by 12pm next business day" crap. I'm sure we've all had at least one NSF charge at the bank because of the funds available thing.
actually a triple dupe. it was denounced as a dupe last time i saw it. I think it was on august 15th, too.
geez what you wouldnt do for pageviews.
im too lazy to look up the links. you do it yourself, im out to party.
Gives me images of the normally quiet halls of the federal reserve, where suddenly the walls open ATM slots and start poring billions in cash willy nilly.
And the chairman, walking away mid-shin in bills, trying to look not guilty.
I don't know about the rest of you... but I feel that this move is a great advantage to their TC0. It brings world domination just a step closer to the lowly, homeless hacker. Refer to this article for a more in-depth discussion of TC0.
Toast lands jelly down. If you jelly both sides of a piece of toast, it will hover in a state of quantum indecision.
With the advent of Check 21, banks will now be able to exchange check images instead of physical documents for presentment. The existing Fedline infrastructure (old DOS machines on 16KBS modems (at best)) is insufficient to handle this kind of traffic.
Fedline for the web has been "happening" for some time now - each application in Fedline is being ported over to their web application suite.
A fine is a tax you pay for doing wrong and a tax is a fine you pay for doing all right.
Much has been made of the evil of monopolies on Slashdot (from Microsoft dominating the desktop to Apple regulating music formats).
The Federal Reserve is a private corporation operated and owned by private banks and given special monopoly existence by congress back on Christmas Eve in 1913. This is a very scary monopoly that has (perhaps unconstitutionally) usurped Congress's power to coin, issue, and regulate the American money supply.
While I won't attempt to proffer all of the observations (probably labeled as "tinfoil hat theories" because neither political party wants to call them into question) I will point out a very human readable web page that highlights some of these issues in a phone call to the Federal Reserve Bank of San Francisco.
I realize that the Internet is a public network and that the Fed has every right to switch its internals over to using it. But it will likely cause two bits of controversy.
First, they are a private corporation so if the receive a private set of Class A IP addresses or other special treats it will expose some flaws in the public vs. private issues of control of the internet. (This is probably of more interest to slashdotters.)
Second, The Fed may be exposing tremendous auditability and accounting problems that don't exist on the private network. While their books and procedures are publicly audited, they have simply "lost" money (both physical and transactional). The paranoid would suspect that perhaps they've been inspired by the Diebold voting systems which can apparently cause votes to simply come and go in an unaccountable manner. The less paranoid should still see that this change will need a great deal more publicly auditable security to keep robber barrons from simply coming up with a new means of screwing over those of us who rely on cash & credit.
I can understand the need to migrate from old proprietary technolgies to new ones, but this migration should be watched VERY closely and where possible should be opened up for further audit and regulation.
The Federal Reserve System is the US government. It has a single goal...to keep the US economy running as best it can. It is truely independent from political and partisian politics. It makes all its decisions in private, with no input from the Exceutive (President), Legislative (Congress,Senate) and Judicial (Supreme Court) branches. All descision makers are precluded from direct investment in any securities and from being associated with any companies. (They cannot be officers nor sit on any board of directors). In a truely transparent system, (which should be implemented in more aspects of government) any and all meetings, discussions, and decision are recorded, and considered confidential. But are released 90 days later when any actions taken or contemplated are already completed. The individuals in the top positions in the Federal Reserve are truely selfless, devoted people. The Federal Reserve basically controls money, they can print money (dollar bills), they can take money out if the economy (detroy bills), they issue federal debt (via T-Bills), they remove federal debt (buy T-Bills). They dictate how much banks can lend out (credit), and how much interest the bank ultimately must pay to the government. The also regulate the banking system FDIC, credit cards term, check clearing etc.They control all aspects of money so that an economic melt down like the great depression does not ever occur again. They have done a done an excellent job since they can into existence. Please do some research on the internet, it is one of the most powerful yet completely transparent institutions in the world...and they do a great job.
Obscurity does not decrease security in and of itself. If you have a truly secure system, obscurity may increase the security somewhat. However, if your system is insecure, obscurity won't stop a determined adversary.
How else are they suppose to tell us they cant transfer this from there because the 'terrorist' have shut down the internet? Then they can make a big story of how we must fight terrorist and start a war. The previous setup was way too stable, The US doesnt want stability, They want chaos, to stir up and otherwise braindead economy. You see, you either have a real economy with real people trying to help all each other. Or you have a bunch of idiots and a few intellegents and a 'fake' economy.
Of course you're not the only one that thinks that is a very bad idea. There are hordes of technical people who think in terms of bad slogans.
The problem with "security through obscurity" is that when that is your primary, or only, protection, it is usually very poor security.
On the other hand, if you start with very good security and don't publish any details of additional steps, and you guard your network as if everyone does know the details anyway, then obscurity enhances your security.
In other words, obscurity does not provide much security, but it can enhance your security.
The Federal System is not the US government. The Fed's stock is 100% privately held. The does not pay income, its books are not open to Congress, and attempts to view its books using the freedom of information act are routinely denied (eg: FRB Vice Chairman Alice Rivlin's April 22, 1999 FOIA appeal denial, refusing expedited processing of FOIA request because "there is a substantial question... about whether making information available on the Internet constitutes dissemination of such information within the meaning of the standard").
As some have observed, with these kinds of transactions, denial of service is probably a bigger threat than fraud. These are huge transactions between banks that you couldn't exactly route into you Citibank personal checking account and withdraw at the nearest ATM, and they can be reversed if something goes wrong.
So the question is, is the risk of some sort of DoS attack on the internet, despite their precautions, greater than the cost of using an ancient, legacy DOS-based system? Probably in the long run, no.
Keep in mind that this thing is probably going to be pretty much invisible to anyone on the internet. Most likely they have a sort of VPN and their firewalls will block even pings from computers that are not part of their Fed network. As someone who works in IT I know that this is obviously far from a foolproof situation, but there's no reason they can't do it right. If there were some sort of catastrophic disruption, I should hope that they have fallback plans to a off-internet means of clearing transactions, which would no doubt be costly and inefficient, but the idea that the entire Fed banking system would implode because of a computer crash is somewhat ludicrous. I hope.
transfers now take place over the internet instead of via a private banking network.
A private banking network is the ultimate level of security through obscurity. In such a closely "protected environment" one could get away with being very lazy, but we don't know if they have or not, becuase it's private. All we DO know is that it seems to have work reliably for a long time. Generally, this would give me faith in the architects ability to construct a well built, resilient network.
Might a DDOS attack on the Fed's computers bring down the entire banking system?" The banks have put some thought into security.
Not likely. A well thought out network pan can prevent this from happening.
They aren't specifying the types of security measures that will be used (security through obscurity?)
Why should they? For "peer review"? I'm thinking that the banks have this one covered. In their case it is in their best interests to have the best security possible. In fact, I read somewhere that banking institutions are testing the use of entangled particles for use in secure transactions, sorry no link.
Am I the only one who thinks that this is a very bad idea?
Probably not, but I think so far they have done a good job, I'm not worried.
I work for a decent sized bank data processing center. We have been using the web-based FedLine for quite some time now. We do transfers to and from the Federal Reserve in Minneapolis (sp?), St. Louis, and Kansas City. We have been trying to migrate from the old modem based FedLine method.
I feel as confident about the web-based system, as I do about non-web based version, that we have used in the past. The old system is very outdated, it connects to the Fed at 9600 Baud or less, and there really is no reason as to avoid the web-based version, as opposed to the old dial-in version. I think they would both be as succeptible (sp?) to any sort of hacking attempts, just two different methods.
This is really not a big deal, and its really not all that new. I for one will be happy when the Fed moves away from their old FedLine though.
YOU'RE WINNER !
Another lame blog
They aren't specifying the types of security measures that will be used (security through obscurity?) Am I the only one who thinks that this is a very bad idea? Might a DDOS attack on the Fed's computers bring down the entire banking system?" The banks have put some thought into security.
This isn't internet voting, it's about money. For this, security and reliability will be a top priority.
I am not a sig.
"the internet made me rich!"
Let's see if I can blast through your tin foil hat:
First it is not "a private corporation operated and owned by private banks" Frequently Asked Questions about the Fed
"The Federal Reserve System is not "owned" by anyone and is not a private, profit-making institution. Instead, it is an independent entity within the government, having both public purposes and private aspects."
Second, there is no confusion over public / private control over the internet. It is publicly controlled. Congress can revoke ICANN's authority any time it wants.
Further, the Fed is not unconstitutional. I suppose an argument could be mabout the non-delegation doctrine, but that's deader than the 2nd ammendment in Ginsburg's utopia. Further the court has recognized delegation guided by an "intelligible principle", which using monetary policy to maintain macroeconomic stability certainly is.
Finaly it is not evil. It has done an amazing job of executing monetary policy. The two most recent Chairs Greenspan and Volker are amazing men.
The alternative is to have Congress control monetary policy. Bad idea. Can you imagine the confidence that would be inspired if Congressional hacks had control of the money supply? Yikes.
PS The Fed was created on 12/23 not 12/24.
Except you refuse to look at the bigger picture.
It's like saying, "Man, we have all these electronics that use up electricity. So we have to build more generators. But building new generators uses electricity! Wow, what a crock!"
Reality is far, far more complex than any simple abstraction.
1337
Might a DDOS attack on the Fed's computers bring down the entire banking system?"
7--Core Principle VII:
The system should have a high degree of security and operational reliability and should have contingency arrangements for timely completion of daily processing.
Let me quoth for those who don't read the articles:
Fedwire Data Centers
Three data processing centers support the Fedwire services. One site supports the primary processing environment with on-site backup. A second site serves as an active, "hot" backup facility with on-site backup. A third site serves as a "warm" backup facility. The three data processing centers are located a considerable distance from each other (i.e., hundreds of miles) in order to mitigate the effects of natural disasters, power and telecommunication outages, and other wide-scale, regional disruptions. In addition, all three data centers have appropriate security and include various contingency features, such as redundant power feeds, environmental and emergency control systems, dual computer and network operations centers, and dual customer service centers.
Take a read through it, and its a really dry read by the way, it looks like they've got it pretty much figured out. Good luck finding those servers and then trying to DDOS them out of existance. Then again, if someone almost got the worldwide DNS root servers offline, then this could be just a drop in the bucket...
It seems to me that this is a perfect ploy to take control of the Internet.
The Federal Reserve is a private banking cartel (banking act of 1913) that get's money from the US congress (practically for free now that the gold standard is gone), and they loan it to other banks. When the US got into debt, they (the banks and others who have borrowed it) now collect $300 plus billion per year from Congress...who they got it from for free in the first place...
2004 Interest Numbers:
July $15,097,639,601.03
June $84,468,634,709.08
May $20,432,938,610.90
April $12,755,485,706.79
March $14,096,687,261.36
February $15,150,706,352.06
January $13,004,064,259.60
December $82,435,960,974.56
November $19,292,044,501.20
October $13,311,682,915.94
----------------------
FISCAL Year Total $ 290,045,844,892.60
see: http://www.publicdebt.treas.gov/opd/opdint.htm
Let's see... I'm thinking about giving control of my families bank account to my friend John (cause he's better at numbers than me)...
60 years later...My kids need to borrow some money...perhaps John (or his networked friends) can help us out?
Perhaps I should check into Johns background...and learn that the friends that he loans the money to are actually creating an environment which pushes me into debt...forcing me to borrow my own money back from him. Oh well, there isn't enough transparancy to see those connections...so I guess I'll just borrow the money cause times are tough...
The Federal Reserve is in big trouble. Transparancy is hitting them hard. Check out Where Is the Money?
And check out the collapse of the US dollar, which is an exact inversion of the success of the Dow Jones:
USDollar vs. DJI
If the Federal Reserve can move towards using the Internet, then the entire world financial system will be sitting on top of this network. Then if the system crashes...they can blame it on the Internet, and they can rebuild the entire system, banking and Internet, in one fell swoop.
That sounds like a grand conspiracy theory to me. And we know that conspiricies are now true, in the age of perpetual war;)
Just hope that they won't transfer money like in the movies - One dollar at a time :)
Visit http://ringbreak.dnd.utwente.nl/~mrjb/growingbettersoftware to download your free copy of the book
During the early days of the Web, before Java, scripting languages, and Active X controls, people knew that running remote code on your computer was simply wrong. Now look at all the viruses and worms that propagate through the Internet simply because remote code can be loaded onto a computer and run so easily.
Any banking network must be completely physically separate from the Internet. And It must use an entirely different system, incompatible with the internet as well, using different hardware and protocols, just in case somewhere along the line some connection is inadvertently made. This would provide the same "security through obscurity" that Linux and Mac users enjoy in an internet full of Windows viruses.
Any attempt to somehow integrate banking with the existing Internet will eventually result in security breaches. No matter what kind of encryption or even hardware methods of security are implemented, there will constantly be new vulnerabilities discovered if there is any physical line of access from the public internet.
Hardware firewalls have already been proven to be succeptible to network attacks via DNS. Some people have a clue about this, given the example of a two headed hard drive previously mentioned on Slashdot, to physically separate the hard drive writing process from public access.
nt
Read the truth about the Federal Reserve here:
http://aor.cat4.net/nwo/sfr/index.php
Summary: It is the greatest bank-robbery of the history.
The GAO and the Comptroller General can review their books anytime they want. That's what an audit is.
The GAO is the accounting arm of Congress.
ie. your site is full of it, as are you.
HBI's Law: Frequency of calling others Nazis is directly correlated with the likelihood of the accuser being Communist.
At least when they head out on the old internet, they know that there are threats and will take action. In a private network they'd be more likely to be lulled into a false sense of security and prhaps have intrusions that they are not aware of.
Engineering is the art of compromise.
Why is this needed? why cant they just use the private networks?
The private bank networks have seem to have worked fine for the last decade or two, so why fix it if it aint broke? hell the internet is the LAST option I'd go with for transfers, the fact the internet has an open nature, if they're using a Secure VPN then I dont see too much of an issue, but why change from a private system without any known issues to a system that is open to the entire world and the public no less? isnt this a flawed idea?
or is there a grande scheme to this, like unifying all the banks of the world or something?
Why would ANYONE put out a negative review of the person who holds their financial future in a vice?
Like, if you could audit your bank manager, would you? Would you issue a bad audit knowing that he could foreclose on your house and send you, your wife, and your children into homelessness?
Quit hiding behind idealities. This is REALITY.
+++ATHZ 99:5:80
The early (DarpaNet) Internet was designed by the US Government as a cold war computing network. It was to remain intact in the event of one or more portions of the network being obliterated in a nuclear attack. Multiple point to point connections that could re-route to reach a destination.
Today's Internet is much more dependent on large pipelines and due to increased traffic is more vulnerable. Worms like Code Red and others effectively shutdown the Internet making it essentially useless. This lasted for days and weeks as new viruses spun off from the older viruses.
The question would be not so much the security of the Fed's connectivity but the reliability of that connectivity. Say you have another worm outbreak due to some flaw in WinXP SP2 that causes the Internet to literally flood with massive amounts of traffic that ends up consuming 90% of the bandwidth and ends up bottlenecking and strangling the connections in highly populated areas. The Internet as it exists today needs a serious upgrade in the next few years in regards to bandwidth, encryption, and protocols.
Just look at what happened in NYC to both the cell phone networks and the landline's when 911 happened. They were so overwhelmed by the network traffic that many people could not make a phone call. Millions of people in NYC picked up the phone and Millions more outside NYC tried to call family and friends in NYC.
John? Is that you? I recognized your web site...
I agree that the Fed's independence is a good thing and has been well preserved. Some of the reason for its success is that it's run by the very rich and they have shown an enlightened self-interest that a healthy American economy is good for their own pocketbooks. That's not cynical; that's probably one of the best ways to manage a money system.
It is an awkward entity though. It can offer small dividends to investors which is something that other independent government authorities don't do (Supreme Court dividends?). There are some holes of law where they don't quite fit legally and the delegation of constitutional authority is only one obvious place to point out. I don't find the Fed a scary institution because of who runs it as much as it's legal definition appears to be a Model T trying to be souped up to run on the Los Angeles Freeway.
Prior to this administration, I would have thought that the Geneva covention and international treaties on human rights gave the US Government a pretty solid framework for humane treatment of prisoners of war (and it's own populace). Ashcroft and the current administration brought forth new legal doctrine in the patriot act and by slipping through holes in other legislation with terms like "enemy combatants" rather than "prisoners of war" to obfuscate laws already on the books. I always thought that the enlightened self interest learned by pledging "We won't commit horrors on your prisoners, if you won't commit them on ours" was enough to keep torture and denial of human rights as only footnotes in history. But, in light of the way this administration has exploited things, it's apparently a big deal to actually plug holes in the legal system before someone takes advantage of that.
I won't speculate on what form these exploits might come from or whether it would be greed from the private-side or a lust for power from the public-side, but both are a danger. In the meantime all that I can ask is that there be as much auditing and public scrutiny as possible.
Trust in trust alone? I have severe doubts today about that.
I haven't read the entire FedLine manual, but I don't see anywhere that says this is going to be on the internet -- only that it will use Internet Based Technologies.
If they're running an Encrypted VPN over leased lines on an airgapped network, then this story is nothing but "Fed to update network protocols to TCP/IP, just like everyone else has done."
First read the comment from the guy who works at the Fed, where he talks about what kind of data WILL now be going over the public net.
Question: in view of everything which has changed in the last three years regarding powers to do secret searches and wire-taps without a warrant, how does this news change what kinds of banking data will now be secretly sniffable by the DHS & FBI without technically violating inter-agency restrictions?
It's very nice of our government to utilize a secure foundation for the US banking system that can be circumvented by a shovel, chain and a pickup truck.
boycott slashdot February 10th - 17th check out: altSlashdot.org
Sometime between now and new years, the Fed will activate a new business function (based on the Check21 law, passed by Congress in 2003). That will allow banks (who wish to do so) to 'truncate' the paper-passing of physical checks and send an image of the check (along with the MICR scanned data). Those images will be in B/W TIFF files. Now, any bank that handles a sizeable number of checks per day, is going to have quite a bit of data to move in the evening. The fed-cutoff times that have been posted, make it monetarily adventagious to the banks to get the data moved sooner rather than later. And who do you think has the biggest pipes to move some of that data ?
Why the internet of course. google Check21 to see more info on how this in being handled. Oh, and don't expect your checks to take 2-3 days to clear cross country anymore.
Ray
This msg is brought to you by the letter 'W'.. for Worthless Wuss
Quit hiding behind idealities. This is REALITY.
Please...take your own advice. Every government agency has its own egotistical leader and egotistical employees who want credit for their own work. Believing that they are all mindless automatons who toe the governmental line is asinine.
The Fed was specificially designed to be neither government nor private - a weird combination only seen in places like MITRE. Government auditors aren't going to even see the Fed as the same team, since they don't answer to the same people. They'd be all too willing to crap all over the Fed.
I used to work for the Fed for a bit. I work for the DoD now. I've seen both cultures and they aren't the same at all.
Remove your tin foil hat, it's constricting the blood flow to your brain.
HBI's Law: Frequency of calling others Nazis is directly correlated with the likelihood of the accuser being Communist.
They tend to be looking at the wrong things in my opinion. I'm 15, and I recently just set up my first bank account with Lloyds TSB- and nearly got arrested. The *really* competent manager filled out the forms by hand, then typed them onto a program on win 2k, then printed them out, checked them by hand (as in, pencil), then typed them in again, and finally printed them out and filed them. This involved going out of the room a lot. When she was typing them up on screen, she turned the screen my way so that I could see what was going on. At one point she turned the screen away, and said "Sorry, I have to turn the screen away now, incase any other users' details come up". I said "That's okay- I don't want to see anyone else's bank details- if I did, I would have put a keylogger on the computer when you were out of the room, as there aren't any CCTV cameras in here, only a motion detecter and pressure plates under the windows." She looked at me. "I locked the computer when I went out of the room" "I know. A key logger is a physical device- the cable run for the computer setup is in front of me. The keyboard cable goes in the left end. The computer is situated by your right foot, around a 90 bend. I know the average lengths of PS/2 cables- the extension joint should be around my elbow. It would take about 15 seconds to pop the cable run cover off, plug one end of the key logger into the extension, the other into the cable from the keyboard, and put the cable run cover back on. I could come back a week later to this room, and while you were out of the room take the keylogger out, and go home with it. I would then have you username and password, and all the details you'd- or any one else - had typed into this computer, and could wreak fun in your name." She looked at me, very strangely "Uh....Please excuse me...I'm just going to get another form..." She came back about 30 minuets later, holding a tax form, and seemed to be sweating... So, yar, banks. 5 security cameras in the lobby room where all the tellers were- it was about as big as our bathroom- covering every square inch of it, at the same time as having the 2 cm thick glass that makes up the tellers window' held on by 4 small wood screws that went through into a wooden frame (i.e. you hit that with a shotgun, and the plate glass falls backwards). Complex burglar alarm system- with the box inside a set of double doors that make up the entrance. Very thick internal wooden doors complete with steel front- and with simple warded locks that had 3 pins. I wonder if they'll have the most obscurely paranoid system of transfer- 4096 bit cypher, etc, etc- and the super user account would be "admin" - and have a password of "admin".... Off topic: A friend of mine somehow managed to enter his password badly 6 times while drunk. He now thinks he's IP banned, as slashdot.org dosen't respond to anything- pings, nowt. He's emailed banned@slashdot.org, but no response as yet. I don't think he has a network connection problem, and he's *really* annoyed at not being the only geek in Suffolk to not have access to ./. Has anyone had any similar problems? His email is basically anything you like @sdonag.plus.com (like, say, slashdot@sdonag.plus.com). Help?
My UID is prime. Is yours?
Silly bureaucrats, just because there's an extra 'D' doesn't mean it's better!
;>
If only we could get the IRS to follow suit, life would be good.
Remove your tin foil hat
Nice quip. Do you feel superior now?
There is no tin foil in recognizing the greed of men. This trait has been evident throughout history and only the truly ignorant would seek to dispel its reality.
So, back to the question, why should anyone believe that the Fed is acting first and foremost in the interest of the general populance as opposed to their own familial preservation? The answer: There is no reason. Greed conquers all. The only real solution is decentralization.
But, back to reality, big government is here to stay and, without it, the corporations would have all of us be indentured tenants living in squalor. So the choice is really a non-choice. We're all screwed.
+++ATHZ 99:5:80
Woe, the federal reserve isn't federal at all
It isn't even close to being constitutional
It's fraudulently shoved this country, up against the wall
Woe, the federal reserve isn't federal at all
I guess our 56k Frame connection to the Fed for wire transfers don't count eh? We haven't used Fedline in years!
Carriers are notorious at bad security, particularly on PVC's and other "private" links. You enter this cloud and they claim it's secure.
Going over the Internet is no different than using a modern frame PVC or ATM link, particularly if you're using C&W infrastructure as their GIN architecture *is* the Internet with VPNs over it.
Properly risk assessed, and with appropriate key management, going over the Internet has only one major failing - quality of service. If you can work around that by using multiple providers, there is nothing really wrong with using the Internet as a transaction medium.
Andrew van der Stock
I believe it was FDR who said, "We have nothing to fear, but TERRORISTS." Wiser words have never been spoken.
I could not justify my existence if I were a turkey farmer. Would I terminate myself? Undoubtably, yes.
Probably not. Don't know what your frame relay connects to, other than various telco COs. Frame relay circuits can have several or even many endpoints, distinguished by their DCLIs (Data Link Connection Identifiers). One or more of those endpoints may be an ISP, but not necessarily.
Secrets of the Federal Reserve
by Eustace Mullins
http://aor.cat4.net/nwo/sfr/index.php
the choice is a non-choice within the current system, that is, capitalism.
the entire idea behind capitalism is that humans have labor, for which they are paid capital, while capital commands labor, and the profits gained from employing the use of labor create more capital which can be invested, used to hire more labor, etc etc. The point of it is that the way needs are met and life is lived happen according to what makes this artificial construct called the monetary system live and breathe, which may not necessarily be at all like what is ideal for a human being with all of our nontangible traits.
the other end of the one-dimensional line of this thinking is socialism/communism, which has been proven by history to not account for human nature and thus to always end up in a massive concentration of power like a dictatorship. so neither of these has worked on its own.
as it is now capitalistic systems are heavily regulated to prevent extreme monopolies and other abuses of power deemed reasonable to forbid. this is not an ideal solution, just a working compromise.
the real challenge would be to find a system that works in the real world and has none of these disadvantageous tendencies. the only other model of which I am aware that fits these criteria are the primitive ones, where everything is kept small and local, and often such communities could not be smaller without compromising long-term self-sufficiency. Corruption and other abuses are kept to a minimum, which is what you would expect when the leader/elder is your neighbor and shares in work much like you do. There exist right now many such societies of primitive tribes who need no police, no central government, and very little authority in any single person's hands. Of course they also don't have indoor plumbing, airplanes, or computers.
I would love to see the merging of both of those worlds instead of the mere compromises we've implemented large-scale so far.
HIGHLY paid engineers
This is the Fed of which we speak? Trust me, they're not particularly highly paid. Average salary is in the 50K range.
...a short while ago to set up a checking account and the nice woman sits me down across from her desk, swivels her LCD so I can see it and, what the F**K, it's running MS product! I politely said, "Ummm, something came up" and left.
I've heard it said that any system is only as strong as its weakest link.
Everything in the Universe sucks: It's the law!
I am the team lead for product develop group that specializes in both ATM networks (financial) and online EFT/ACH.. for a leading banking software company.
There are multiple fed districts with multiple feeder sites already in existance for the multiple switching/private networks that already handle the bulk of fed financial transaction work. The rest comes across private networks as singular batch files that maintain transactions in ACH/NACHA/EFT formats.
The fed take this stuff pretty seriously and have considerable experience. You can expect IP specific + encrypted + password authenticated verification systems.
To code is to foo. Or.. is it to foo is to code..
It sucks. Nuff said.
from the last link in the article:m l
An institution that maintains an account with a Federal Reserve Bank generally can become a Fedwire participant. Participants use Fedwire to instruct a Federal Reserve Bank to debit funds from the participant's own Federal Reserve account and credit the Federal Reserve account of another participant
Instead of focusing on all the bad things that can happen, think about a positive aspect. Security is a relative concept anyway, look at paypal. How about scaling this system up an order of magnitude and voila, Digital Cash. Visa/mastercard won't like it but so what. We really do need a digital currency and as I recall this is a function of the federal government.
http://www.house.gov/Constitution/Constitution.ht
Article I Section 8
Clause 5: To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;
Clause 6: To provide for the Punishment of counterfeiting the Securities and current Coin of the United States
I think someone misread 'web' as internet. I believe all this means is that it can be accessed using http
If you liked this thought maybe you would find my blog nice too:
Check out the security procedures section. It states quite clearly the two options are dedicated lines or using a telephone (by hand).
Unless someone can't point out where it really says they are going online I'm going to assume this is just a confusion of web interface with internet.
If you liked this thought maybe you would find my blog nice too:
The Fed is regularly audited by the GAO.
If Congress thought there was a problem, they could take control back at any time.
The whole point of the Fed was to depoliticize currency and banking in the US. It makes great fodder for tinfoil hat types/Art Bell listeners to concoct conspiracy theories about, but the Fed is rather transparent and focused on its goal which is embodied in section 2A of the Federal Reserve Act:
The Board of Governors of the Federal Reserve System and the Federal Open Market Committee shall maintain long run growth of the monetary and credit aggregates commensurate with the economy's long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates.
During my time there, I saw two things going on. First, reliable armed guard maintained over large gold and currency reserves. Second, incredible amounts of statistics gathering with the intent of producing a firm picture of current banking and economic trends.
No Star Chambers, no evil men and smoke filled rooms.
Sorry to burst everyone's bubble.
HBI's Law: Frequency of calling others Nazis is directly correlated with the likelihood of the accuser being Communist.
(oh, sorry)
I didn't know we had a reputation.
THIS THING CAN TURN ON A DIME, MACROSSZERO STYLE ALSO FUCK BETA, ~NYORON
Inflation is just an offset to any back-of-the-envelope calculations you have on the rate of return of any investment you make or loan you take out.
And don't carry too much cash. We've figured out that since material goods depreciate with time, so does money (it's worth being defined only as a medium of exchange between goods). If money never lost value, you'd never spend it (because clearly the money will be worth more next year).
You want stability? Buy a precious metal or some land.
THIS THING CAN TURN ON A DIME, MACROSSZERO STYLE ALSO FUCK BETA, ~NYORON
US Federal Reserve network goes down due to massive hacking attempts. Economy grinds to halt. Paranoia sweeps the United States. President urges everyone to remain calm.
There's no place like localhost
Not any more. Really, most of the money exists just as data in computers. That's a fine method to use. Remember, all that money is is a representation of work that has been done, a method of "storing" value. Rather than bartering for goods and services directly, which doesn't work well (you may have something I want but I don't necessiarly have something you want) we store value in a commonly agreed upon medium.
Orignally it was precious substances, gold and silver being the most common, but salt and others were also used. Then you started seeing paper currencies emerge. The Medicis and the Frugers were largely responsible. You could trade your gold coins at any Medici bank for a paper note, which could then be exchanged back at any other bank (less a small fee). However all the paper currency was just a lightweight proxy for the precious metals.
The US orignally had backed currency like this. Dollars were silver notes, meaning you could exchange the note for equivalant amount of silver. Well as economies grew, this got impractical, so notes became unbacked. You don't actually need anything behind them, just so long as everyone agrees the notes are a common standard of stored value. It's again just a tool for making the economy work.
The next step came with the telegraph. Now you could communicate over long distances and likewise might want to pay someone over those distances. So a system was invented for wiring money. A bank would send offical notice to another bank that such an amount of money was being transfered. IT would then be made available to the person it was transfered to. The origniating bank owuld then get the actual money there later.
Computers made it such that even this was unnecessary. There wasn't any need to have any physical money transfer. So long as the system was secure, trusted, and one all banks agreed upon, electronic representation was fine. To transfer money a bank would just tell another bank the amount of the transfer, and the computers would update the numbers.
That reall is how it works these days. That's not to say there is no currency behind the numbers, or things of value behind the currecny, but most of it exists only in computers. It's an idea that seems strange to most people but really, all that currency is is a facilitator. It just makes the economy work. A means, not an end to itself. Most people see it as an end, though, since that's how you deal with it in everyday life, and thus the logical disjoint.
The Federal reserve system (the Fed) is a group of banks that support and adminster the issuance of currency, regulate banks and act as a "lender of last resort" for other banks in the system. The Fed was created in the 1910's with the overhaul of the banking system. The Fed's site has a good overview about its structure.
Many of the posters have complained about how the Fed issues currency, focusing on the accounting slight of hand when the Fed effectively sells currency to the U.S. Treasury. While the accounting is a bit odd, this is necessary to have the debits equal the credits on the respective balance sheets and not much more. Stow your tin foil hat in the overhead compartment.
The Fed also serves as the bankers bank, speeding transactions between banks by acting as a clearing house for transactions. The Fed makes a nice income from this service, skimming a bit of money from each transaction. Without a strong clearing house, transferring money between banks would be riskier and therefore more expensive.
As you have also read, the Fed is involved in manipulating the money supply to keep real inflation close to 0. This "honest money" policy means that the value of a US dollar will have nearly the same claim on resources from year to year. Before the Fed system, there was little regulation on the money supply (it adds money by buying bonds and subtracts my selling) and the Federal goverment would typically run the printing presses when it needed money, debasing the currency. Remember, price inflation is really money deflation. As the price increases, what's really happening is that money is becomming less valuable.
Don't long for the pre-Fed days, inflation was rampant. With the Fed today, the goverment can't just create money by running the printing presses, instead it has to buy it from the Fed.
Gold-based (or any other commodity) currency has its own problems, too numerous to list here. Nixon did the right thing at Brenton Woods by getting the US off the gold standard for good.
Lastly, because of the liquidity the Fed has added to the banking system, you can do thinks like take money out of your savings account without waiting 6 to 8 weeks like the old days or get deposits credited to your account in 1 - 3 days, not weeks like before.
Indeed, the trascript is quite slanted. I thought I'd made that clear.
I should have hunted around the net for a better and more balanced account about the Fed. But the conspirational aspects often lead to Illuminati speculation or really wacked out "control of all governments" theories from the "Fed is bad" group. On the other hand the "Fed is good" group often emphasize the safe & trusting aspects of the Fed and give no mention (or very dismissive mention) of some of the questionable economic and legal aspects of the Fed. This was a recent transcript I'd happened to run across from the "Fed is bad" group that didn't go overboad with UFO's and Illuminati.
I remember some of these same issues brought up in a 9th grade American history class about the pyramidical nature of the Fractional Funds rate and the questionable foundation on which the Fed was granted power. At a time when most of us thought Paul Volker played in SteppenWolf, our naive questions were not intended conspirationally. There are some seriously "unique" foundations on which the Fed operates. Good or bad in their potential, we've benefited from a good set of boards of governors to watch over it. But I think it's a very reasonable question to ask how long that will last.
Admittedly, the original version of this "phone" trasnscript was probably sent around in email or posted to usenet years ago. I don't follow the host's website and I bet the original author probably did edit things to emphasize his knowledge and the Fed's shortcomings. That wasn't really my point as much as to call to attention the possibility for abuse and the odd nature of the auditing and control which sets the Fed apart from our government (for good or for ill).
I have no problem ENABLING this to work on the public internet, but they should seriously consider Plan B: A private Internet.
The costs would be higher, with dedicated lines and physical isolation, but the risks of something going wrong would be lowered.
It's a trade-off, and I trust them to make the wise business decision. The nice thing about standard protocols is if they guess wrong, with some amount of effort and money, they change their mind without starting over from scratch.
Knowledge is how to play a game, intelligence is how to win, wisdom is knowing what game to play.
However, the Fed could issue an announcement that they are also going to use the Internet to transfer funds... and not actually do it. Let amateurs waste time chasing phantoms, and make some decoy open ports in various places.
SWIFT is an irrevocable payment transfer system. It doesn't guarantee liquidity, that is up to the Fed in the US, or whatever is the local Central Bank. For info on international interbank settlement risk, check out Herstatt Risk named after the failure of the Herstatt Bank (German) during a complex international transcation where the interday netting failed due to the differences in time zones between the US and Germany.
See my journal, I write things there
...wiretapping modems should be easy, right? it's not. it's *murder* tapping analogue modems and trying to get a signal: the two ends are slightly out of synch, and getting realtime tapping going is very hard indeed. whether it's harder than triple-DES encrypted VPN or IPSEC's another matter though...
I was reading an article the other day about one of the big international financial networks switching to IP protocols, but they were going to do it over a private network. The fed could be going to IP via dial up to replace whatever dos monstrosity they have over dial up.
The funny part of the article I was reading was that they were supposedly moving from `outdated' X25 to `modern' IP. Aren't they both children of the 70s? (if you look closely, each packet has platform soles and flared trousers)
_O_
.|< The named which can be named is not the true named
That's grand and everything, but don't you think that maybe they'll not have a press conference where they give out all of their IPs? The only people who need to know about the machines are the large banks, and I believe there's generally a policy in such places to not hire skript kiddies.
the entire idea behind capitalism is that humans have labor
the other end of the one-dimensional line of this thinking is socialism/communism
Okay, even say for a moment that you are thinking about what you type everything should be obvious to you as of this next remark:
as it is now capitalistic systems are heavily regulated
And a system of capitalism with unending government rules and regulations is known as: communism.
Quit blaming everything on capitalism. It is natural for men to want to increase their holdings, whether it be money, or chickens, or land, or anything. The real issue here is the enormous system of governmental loopholes which require legal budgets and enormous teams of lawyers to exploit. It is not capitalism that favors those who are already wealthy but rather the enormous legal obstacle course which costs money at every turn.
I am aware that fits these criteria are the primitive ones, where everything is kept small and local, and often such communities could not be smaller without compromising long-term self-sufficiency. Corruption and other abuses are kept to a minimum
Primitive has such bad connotations. Dare we say "libertarian" for fear of being ostricized? I agree, the only real choice is to try and MINIMIZE corruption and abuse. In reality, however, big government is unbeatable and big industry is no less a formidable opponent.
We're just screwed.
+++ATHZ 99:5:80
proof
I just finished leading a $200,000 project to covert the bank I work for to a new VPN-powered network for internation wire transfers (SWIFT). I am not security expert, but it seams very safe. I am not surprised that the feds are doing this now. The old technology used currently is getting nearly impossible to support.
The Fed attempts to ameliorate the cycle, rather successfully in my view.
Ugh, sure. Fed starts up in 1913, then there's a long period of high growth and wild speculation, and then a depression. A depression so big, so long and so widespread that it's the only one we call the "Great Depression". We even named a period of our history after it (Depression Era).
Actually, in reality, the FED is owned by the banks that are its members and audited by GAO. FOIA does NOT apply to the Fed, because then you & me (the taxpayers) can see how much money the Govt. is wasting...
Remember: if you run a business the way Government runs its business, you can goto Jail.
"Doing what i can, with what i have." ~ Burt Gummer
Oh I know... Throw the banking network into the garbage. Put all the banks' computers on the Internet using Windows XP without SP2 and without a firewall. Use ROT-13 encryption to protect the transactions. Announce to the world that ROT-13 encryption, the only completely unbreakable type of encryption, is used by this system. You can't go wrong.
My Russian friends are going to love this.
fractional reserve banking as economic parasitism: a scientific, mathematical, & historical expose, critique & manifesto