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Cyber Fears On Fed's Web Plan
From: David Farber <dave () farber net>
Date: Mon, 16 Aug 2004 06:44:16 -0400
Begin forwarded message: From: "R. A. Hettinga" <rah () shipwright com> Date: August 15, 2004 5:11:25 PM EDT To: cryptography () metzdowd com, cypherpunks () al-qaeda net Subject: Cyber Fears On Fed's Web Plan <http://www.nypost.com/business/18671.htm> The New York Post CYBER FEARS ON FED'S WEB PLAN By HILARY KRAMER Email Archives Print Reprint August 15, 2004 -- With little fanfare, the Federal Reserve will begintransferring the nation's money supply over an Internet-based system this
month - a move critics say could open the U.S.'s banking system to cyber threats.The Fed moves about $1.8 trillion a day on a closed, stand-alone computer
network. But soon it will switch to a system called FedLine Advantage, a Web-based technology. Proponents say the system is more efficient and flexible. The current system is outdated, using DOS - Microsoft's predecessor to the Windows operating system.But security experts say the threat of outside access is too big a risk.
"The Fed is now going to be vulnerable in two distinct ways. A hackercould break in to the Fed's network and have full access to the system, or
a hacker might not have complete access but enough to cause a denial ordisruptions of service," said George Kurtz, co-author of "Hacking Exposed"
and CEO of Foundstone, an Internet security company. "If a security breach strikes the very heart of the financial world andmoney stops moving around, then our financial system will literally start
to collapse and chaos will ensue."FedLine is expected to move massive amounts of money. Currently, Fedwire
transfers large-dollar payments averaging $3.5 million per transaction among Federal Reserve offices, financial institutions and federal government agencies.Patti Lorenzen, a spokeswoman for the Federal Reserve, said the agency is
taking every precaution."Of course, we will not discuss the specifics of our security measures for obvious reasons," she said. "We feel confident that this system adheres to the highest standards of security. Without disclosing the specifics, it is
important to note that our security controls include authentication,encryption, firewalls, intru sion detection and Federal Reserve conducted
reviews." Ron Gula, president of Tenable Network Security and a specialist in government cyber security, said he's sure the Fed is taking every precaution. But no system is 100 percent foolproof. "If the motive was to manipulate the money transferring, there are TomClancy scenarios where there are ways to subvert underlying technologies,"
Gula said. "For example, a malicious programmer can put something in theFed's network to cause the system to self-destruct or to wire them money."
The biggest concern isn't the 13-year-old who hacks into the Fedwire and
sends himself some money - it's terrorism. On July 22, the Department of Homeland Security released an internal report saying a cyber attack could result in "widespread disruption ofessential services ... damag(ing) our economy and put(ting) public safety
at risk."But the Fed's undertaking of this massive overhaul is considered a necessity.
"Our strategy is to move to Web-based technology because there areinherent limitations with DOS based technology and our goal is to provide
better and robust product offerings to meet our customers' needs," said Laura Hughes, vice president of national marketing at the Chicago Fed, which has spearheaded this program. -- ----------------- R. A. Hettinga <mailto: rah () ibuc com> The Internet Bearer Underwriting Corporation <http://www.ibuc.com/> 44 Farquhar Street, Boston, MA 02131 USA "... however it may deserve respect for its usefulness and antiquity, [predicting the end of the world] has not been found agreeable to experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire' --------------------------------------------------------------------- The Cryptography Mailing ListUnsubscribe by sending "unsubscribe cryptography" to majordomo () metzdowd com
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