Posted by Robert Vamosi on March 23, 2016
The SWIFT secure financial messaging system is under U.S. government scrutiny after last week’s disclosure of the theft of millions from a Bangladesh Central Bank account at the Federal Reserve Bank of New York. Although smaller transfers between the Bangladesh bank and the federal reserve did go through, a large transfer of between $850-$870 million was stopped at a transfer bank, Deutsche Bank, which noticed a typographical error within the request. Now U.S. Congresswoman Carolyn Maloney (D- New York) is requesting an investigation into how large foreign financial transfers should be conducted.
According to its website, SWIFT messaging services are used and trusted by more than 11,000 financial institutions in more than 200 countries and territories around the world. At issue is whether authentication from the private SWIFT bank messaging network is suitable for the Federal Reserve Bank of New York for outgoing payments from the accounts of foreign central banks.
According to the Reuters News Service, Congresswoman Maloney wrote “We need a thorough investigation to determine how these criminals were able to manipulate the system so that banks and financial institutions can institute standards that will prevent hackers and cyber criminals from siphoning money out of accounts like those held at the New York Fed again.”
A New York Fed spokeswoman told the news service the bank would work with Maloney’s office to arrange a time to talk.