Slashdot Mirror
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.
Shocking. To think they'd use the INTERNET instead of analog phone lines!
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?
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.
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
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?
It's a federal agency that acts as if it were privately run. It's subject to laws (like FOIA) that the rest of the government is subject to, but it has no higher authority that can veto its decisions.
The Fed is a system including twelve regional banks throughout the country, which can issue stock, etc. but are not really privately run.
The main job of the Fed is to adjust interest rates as the governing board deems necessary to keep the economy stable.
See the Wikipedia articles about the Fed and central banks in general.
Slashdot "libertarians": Small government for me, big government for those I disagree with. -1, I disagree with you
(I am not an Economist)
The Federal Reserve "creates" (or "destroys") money by regulating how much money a bank is required to keep on hand. If a bank only has to keep 10% of its deposits on hand, then the rest of the money can be loaned out. The person who deposited the money doesn't lose their money and the money that is loaned out is still real so the bank has created money. In reality the bank didn't print up new dollar bills and hand them out, they are just allowing better use of the money that is in circulation. When the federal reserve changes the Reserve Rate (percent of deposits the bank has to hold) they increase or decrease the amount of money in circulation. Changes to the reserve rate are pretty rare and are the Fed's overkill method of controlling the economy.
The Fed also makes overnight loans to banks when they have a shortfall of cash on hand. The rate of these loans is the discount rate that is always talked about in the news. This rate is also used by individual banks to set the rates of their loans. Changing the discount rate has the effect of encouraging banks to keep more or less cash on hand and changes the "cost" of money. Setting interests rates are the prefered method of the Fed to control things like inflation or deflation.
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.
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
(Formerly known as PayPal)
... 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"...
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.
The main job of the Fed is to adjust interest rates as the governing board deems necessary to keep the economy stable.
You mean that they adjust the interest rates to ensure that the US Gov't will never be able to pay back the debt that they owe to the Fed, thus keeping all of us normal citizens forever enslaved to pay back a loan that we never even asked for.
It's convenient for the people closest to the top of the pyramid...
+++ATHZ 99:5:80
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.
Would you prefer gold, some other metal dug out of the ground or rare sea shells?
A lot of people do... Putting money in gold and other precious metals has been the hallmark of "un-patriotic" money management for years.
Basically your choices are:
a) put faith in a completely made up system run by "the authorities".
b) put faith in continued scarcity of certain once-precious resources.
Neither is really all that appealing. Personally I put faith in my ability to make computers do stupid tricks. Other than that, I figure ride the tides of fortune that come your way.
Both efficiency and accuracy would have been better served if you had just replied "I have no idea." in the first place and left it at that.
What I'm listening to now on Pandora...
Close, but no cigar. What gives money its value is our collective agreement to accept it in payment. When you come down to it, we're really bartering, but instead of having to have goods to swap, we swap something easy to carry and of a known (if artificial) value. Money is just an abstract representation of goods that simplifies commerce.
Good, inexpensive web hosting
They just print a lot more money that they would be allowed to print if the system were regulated by just laws. Who or where does all this money goes to? I have no idea.
techniclaly, printing additional money just increases the amount in circulation, increaes inflation and reduces the 'buying power' of the money already out there.
Eg.
The US has exactly 100 dollars in circulation, and a load of bread costs 1 cent. If the government prints another 100 dollars, you now have twice as much money, but.. bread now costs 2 cents, oh, and people will start demanding their pay rise to twice what it was.
In the real world, the extra money that is printed is a tiny amount, so inflation doesn't double, and pay rises are small; also you have complications like interest rates, but that's the basic principle.
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.
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.
Aaaaaaaaaaaaaaaaaaaaaaargh!
Where to start? OK, what do you mean by saying that money should be given directly to individuals? If you are saying that citizens should just be handed free money on a regular basis (a la Alaska), that's just nonsense. The economy would respond by making that amount of money worthless: if everyone can suddenly afford stuff, prices will rise hard and fast. Not fun. If you are suggesting the Fed should be lending direct to individuals, that's simply not possible. The Fed manages and drives the economy as a whole; it makes decisions about trillions of dollars, not a few thousand for your new kitchen. The overhead of dealing with this kind of loan is not appropriate for what the Fed is for. They loan capital to individual banks, who then loan it out again to consumers. The individual banks get to decide the risk and take on the cost of managing the administration, meaning they have higher costs than the central lenders, which is why the Fed can loan at 3% and you haven't a hope of getting money at a rate like that.
This, by the way, *is* a free system. You don't like it? You can scrape together a few trillion dollars and start your own reserve, if you like. This is the system that has evolved, it works better than the alternatives, and it isn't going to go away.
By the way, I can assure you there are no 'buddies' in the world of higher finance: buddies tend to make very little money, and hence don't last very long.
[FUCK BETA]
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 Reserve is a system set up by capitalists (banks) for capitalists (banks).
Wrong. The Federal Reserve System was set up by an act of Congress December 23, 1913. The Fed is a public/private organization with a complex structure that makes the Board of Governors Federal employees (like Mr. Greenspan) and the staffs of the regional banks private sector employees. Your questions about what it does will be answered somewhat here.
Instead of giving the money to individuals (which is the way it should be done in a truly free system), they pass it out to their buddies in the banking system who make a profit by leasing the money to individual borrowers.
How is this crap insightful? The Fed makes short-term loans to individual banks. These loans are at low interest rates but must be paid back quickly also. Banks also deposit cash reserves with the Fed. There is no 'giving' of money. Even if there were, that's a silly sentiment. "Let's power the economy by giving away worthless paper currency to everyone." It would be worthless because everyone had it in equal measure without any value being attached.
The Federal Reserve also has a very powerful way of making a shit load of money: inflation. They just print a lot more money that they would be allowed to print if the system were regulated by just laws. Who or where does all this money goes to? I have no idea.
Yes, you don't have any idea. You're completely clueless about our financial system. You probably aren't aware that at any moment, there are a few hundred billion in coin and currency in circulation (600 bil or so in 2003). The US GDP in 2003, for instance, was something on the order of 11 trillion dollars. Search that document, it's there. Please note that we aren't even considering bank deposits, stock ownership or any other securities, like bonds.
An intelligent person might come to the conclusion that most money doesn't exist as currency at all. It's only written on paper or stored in a computer somewhere. You'd be right if you came to that conclusion. Therefore, the Fed printing 100 billion more of $100 bills would have a negligible effect anyway.
There's an even more compelling reason why your statement above is stupid. The Fed doesn't *GIVE OUT* money. The funds are either loaned in the short term, or given out of the member bank's deposits to the Fed. Therefore, there is no inflationary pressure associated with $100 bills going to Bank X since they are paid for one way or another.
So how exactly were they making money off of this? Answer: they aren't. They make most of their money off of check processing and ACH transfers which they act as the middleman for.
Essentially, we have the wolves in charge of the chicken coop. There're making a killing, so to speak, and there's nothing you and I can do about it. Other than complain.
Next time you make a comment about something, how about knowing something...anything about what it is you are commenting about?
Thank you.
HBI's Law: Frequency of calling others Nazis is directly correlated with the likelihood of the accuser being Communist.
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
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.
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...
No, he means that they adjust interest rates to ensure that the number of abstract "dollars" roaming around the economy is enough so that there are resources available for investment and a slight upward price pressure (inflation) without so many dollars roaming around that prices inflate rapidly simply because there's more money chasing fewer resources (see, the internet bubble, the so-called housing bubble, blah blah blah).
Deflation is bad because your average person will hold off on making purchases (because disposable/durable goods will become "cheaper" as you wait) and, if possible, get rid of their hard assets (which are devaluing) to build up a stock of ever more valuable cash.
Inflation is bad because your average person will spend cash as rapidly as possible to maximize its value (because disposable/durable goods will become more "expensive" as you wait), and fixed rate debt becomes either impossible to find or a gamble (too low a rate, the lender gets the shaft, too high a rate, the borrower gets the shaft or nobody borrows money to invest because it's not worth the risk).
The job of the Fed is to provide long term price stability, which empirically seems to require an inflation rate of 2-3%. Too see the effects of deflation, look at the Japanese economy over the last 10-15 years. Too see the effects of hyperinflation, look at various South American economies in the mid-70s to late 80s.
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.
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.
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?
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
"This is the system that has evolved, it works better than the alternatives, and it isn't going to go away."
Actually, the founding fathers of the US thought that central banking was a bad idea, and Madison even said that central banking was more of a cause for the war than taxes.
Thomas Jefferson:
"I believe that banking institutions are more dangerous to our liberties than standing armies. Already they have raised up a moneyed aristocracy that has set the Government at defiance. The issuing power should be taken from the banks and restored to the people to whom it properly belongs."
"If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that will grow up around them (around the banks), will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered."
James Madison:
"History records that the money changers have used every form of abuse, intrigue, deceit, and violent means possible to maintain their control over governments by controlling the money and its issuance."
Henry Ford:
"It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning."
Alan Greenspan:
"[The] abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit.... In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holdings illegal, as was done in the case of gold.... The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.... [This] is the shabby secret of the welfare statist's tirades against gold. Deficit spending is simply a scheme for the 'hidden' confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights."
Engineering and the Ultimate
And continued need and want of the resource by others. What if we don't need gold in the future?
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?
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
Actually, although the board of governers is selected by the government, they are not accountable to the government. The Fed is largely a private operation, with very little real oversight. It is a "banker's bank", and is really run by the banking industry, not the government.
Engineering and the Ultimate
...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!
WHY is this modded funny?????
----- Question authority, but not ours. Hate the man, but we're not him.
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.
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.
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