NY lawmaker warns on U.S. financial security after SWIFT attacks

Thomson ReutersPhoto illustration of the SWIFT logo

WASHINGTON (Reuters) – Recent hacks of international banks through the SWIFT messaging system raise serious questions about cyber-related risks to U.S. firms, Representative Carolyn Maloney wrote on Monday in a letter to the country’s top banking regulators that asked about measures to strengthen systems’ security.

Maloney, a Democrat who represents part of Manhattan – home to many people employed in finance and banking – wrote to Federal Reserve Chair Janet Yellen, U.S. Comptroller Thomas Curry and Federal Deposit Insurance Corporation Chairman Martin Gruenberg that she remains “deeply concerned about U.S. banks’ exposure to these new, sophisticated cyber attacks.”

The SWIFT network that allows banks to process billions of dollars in transfers each day is considered the backbone of international banking. But in February criminals were able to use its messages to steal $81 million from the Bangladesh central bank.

Since then, other thefts and acts of fraud have come to light and the Belgium-based cooperative that runs the network is pressing member banks to share information about attacks.

Reuters has reported that Wells Fargo last year approved transfers totaling $12 million from Banco del Austro in Ecuador after receiving requests through the secure messaging system, and that both banks now believe those funds were stolen by unidentified hackers.

Maloney, who is the senior Democrat on a House subcommittee on capital markets, asked the regulators what steps they had taken, or will take, “to ensure that all U.S. banks have adequate security measures in place to protect against cyber attacks that involve stolen SWIFT credentials.”

She also wanted to know how they would ensure that U.S. “members of SWIFT are in full compliance with SWIFT’s recommended security practices and policies,” and whether the agencies had ordered U.S. banks to conduct a cyber security review along the lines of the review ordered by the Bank of England.

“In addition, I believe that your agencies can play an important leadership role in the international response to these cyber attacks,” she wrote.

Maloney is not the first to wonder how U.S. regulators are responding to the threats emerging through the SWIFT system. Senator Tom Carper of Delaware, also a Democrat, last week made similar inquiries, asked SWIFT and the Federal Reserve Bank of New York how they were bolstering security in the wake of the Bangladesh heist.

(Reporting by Lisa Lambert, editing by G Crosse)

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