A COMMITTEE of the world’s major central banks said Friday it has launched a task force to examine cyber security in cross-border banking and to ensure interbank payments are protected, confirming an earlier Reuters report.

    “Recent incidents of cyber fraud are of significant concern for the central banking community, and we are working to make sure there are adequate checks and balances in place at each stage of the payments process,” Benoit Coeure, chairman of the Committee on Payments and Market Infrastructures, part of the Bank for International Settlements, said in a statement.

    Coeure, also a European Central Bank executive board member, added it was too soon to predict the result of the work that had just begun. The Basel, Switzerland-based committee will decide how to proceed based on a review of current practices, he said.

    Reuters reported the formation of the task force, noting it was prompted by the February cyber heist of US$81 million from Bangladesh Bank’s account at the Federal Reserve Bank of New York.

    That hacking incident exposed vulnerabilities in the global wholesale payments infrastructure, and in the messaging network called SWIFT, that banks and states rely upon for daily funding.

    The task force could ultimately set cyber security standards around inter-bank transfers that may be adopted globally. The new principles or guidance could cover responsibilities of banks that send and receive money transfers, and networks like SWIFT that transmit payment instructions in correspondent banking.

    The task force also aims to consider recommending the steps each player should follow if a central bank falls short of protecting its systems from hackers, what role domestic regulators should play, and how to respond if another breach happens, the sources said.

    “It’s in its formative stages,” said one of the sources. “It’s what needs to happen ... but it’s not a fast process.” The other source said a focus of the task force will be identifying where the “breakdowns” are hidden in correspondent banking.

    The sources said the attempted theft of nearly US$1 billion from Bangladesh Bank’s account at the Federal Reserve Bank of New York, as well as other cyber attacks that since came to light, helped spur the committee of central banks.

    In early February, hackers breached the Bangladesh central bank’s systems and peppered the Fed with payment requests via the SWIFT global money-transfer network. Some requests were filled, amounting to US$81 million that disappeared mostly into Philippines casinos.

    A Reuters investigation found the theft happened amid missed warning signs and miscommunication between the New York Fed and Bangladesh Bank.

    (SD-Agencies)