Dudley Says New York Fed Is Working to Improve Cyberdefenses
24 March 2017 - 4:40PM
Dow Jones News
By Katy Burne
Federal Reserve Bank of New York President William Dudley said
Friday the bank is working to improve cyberdefenses at the bank and
abroad, following the theft of $81 million from Bangladesh's
account at the Fed in 2016.
Mr. Dudley said cyberrisk was a "particularly hard risk to
evaluate," in part because cyberthieves are becoming more
sophisticated and improving their tools as the banking industry
catches up to their crimes.
Mr. Dudley's remarks at York College in Queens, N.Y., come as
The Wall Street Journal this week reported federal prosecutors are
building cases that would accuse North Korea of directing the theft
from the Bangladeshi central bank's account at the New York Fed in
February last year.
Philippine authorities in November returned $15 million of the
$81 million stolen, after a Chinese casino operator there turned
over money to the authorities.
"In the Bangladesh situation, their facilities were not secure,"
Mr. Dudley said Friday. "Someone executed a payment that looked
completely authentic" in the network operated by
financial-messaging system Swift, formally known as the Society for
Worldwide Interbank Financial Telecommunication.
A spokeswoman for the New York Fed has said the bank can't
comment on customer account activity, citing client
confidentiality. But when news of the theft broke last year, the
Fed said there was no evidence its own systems were compromised and
that the orders it approved had been authenticated by Swift.
Mr. Dudley said the New York Fed phishes its own employees to
test them on cyberawareness, and is working with international
stakeholders to help ensure the cross-border payments system is
more secure. The focus of that work is to make sure everyone
understands their responsibilities in the global payments chain, he
said.
In a statement last August, the New York Fed said about the case
in Bangladesh that it was part of a team "working together to
recover the entire proceeds of the fraud" and "bring the
perpetrators to justice in cooperation with law enforcement."
Write to Katy Burne at katy.burne@wsj.com
(END) Dow Jones Newswires
March 24, 2017 12:25 ET (16:25 GMT)
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