Take from http://www.nypost.com/business/18671.htm
New York Post Online 8/15/2004
CYBER FEARS ON FED'S WEB PLAN
By HILARY KRAMER
August 15, 2004 -- With little fanfare, the Federal Reserve will begin
transferring 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system is outdated, using DOS — Microsoft's predecessor to the Windows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 hacker
could 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 or disruptions 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
and money 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.
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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 im****tant 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 Tom
Clancy scenarios where there are ways to subvert underlying
technologies," Gula said. "For example, a malicious programmer can put
something in the Fed'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
re****t saying a cyber attack could result in "widespread disruption of
essential 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 are
inherent 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.
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