Skip to main content

  The bank computer hacking crime just keeps getting bigger, and even before the extent of damage has been fully assessed the idea of a taxpayer bailout is being floated.

 Bankers and U.S. officials have warned that cyber-terrorists will try to wreck the financial system’s computer networks. What they aren’t saying publicly is that taxpayers will probably have to cover much of the damage.
 Washington never fixed the Too-Big-To-Fail problem (which is also the Too-Big-To-Prosecute problem), thus it is simply assumed that the taxpayer will always be there for the Wall Street banks.

  The full extent of the hacks is still being determined. JPMorgan Chase's computer systems were compromised for two full months before it was discovered.

The hackers unleashed malicious programs that had been designed to penetrate the corporate network of JPMorgan -- the largest U.S. bank, which had vowed two months before the attack began to spend a quarter-billion dollars a year on cybersecurity. With sophisticated tools, the intruders reached deep into the bank’s infrastructure, silently siphoning off gigabytes of information, including customer-account data, until mid-August.
 How much damage was done during those two months is unknown. A new report says that "some bank records at JPMorgan were altered and possibly deleted".
   It also turns out that the attack "affected seven financial organizations", not just two as originally reported.

   Easily the most amusing part of this whole event is how JPMorgan Chase reported that it wasn't seeing "unusual fraud" in its investigation.
   We can only assume that "unusual fraud" is different from the "regular fraud" that JPMorgan Chase typically engages in. JPMorgan has paid around $27 Billion in fines in the last few years from its "regular fraud".

  Now that we have some idea of how serious this hacking event was, let's get back to the taxpayer bailout trial balloon.

 The government might have little choice but to step in after an attack large enough to threaten the financial system. Federal deposit insurance would apply only if a bank failed, not if hackers drained accounts. The banks would have to tap their reserves and then their private insurance, which wouldn’t be enough to cover all claims from a catastrophic event, DeMarco and other industry officials said.
   Discussions about the government’s role in cleaning up after a catastrophic cyber assault have centered on the Terrorism Risk Insurance Act, or TRIA. States are also pressing Washington to clarify how the Stafford Act, the main statute for relief from natural disasters, would factor in.
  The insurance law, enacted after the 2001 attacks, authorizes the government to provide financial support for insurance companies in the wake of terrorism. It is up for renewal this year. Under TRIA, insurers cover a fixed amount of losses from terrorist attacks with the government backstopping additional costs up to $100 billion. The law gives the Treasury secretary broad latitude to invoke the backstop.
    In private meetings, Treasury officials have told insurance industry lobbyists that the department would treat cyber-terror like a physical attack under TRIA, said the people involved with the talks, who spoke on condition of anonymity because the discussions were private.
 So there you have it. Wall Street will be protected from its own incompetence by the taxpayer because terrorists.
  Republicans in Washington. Democrats in Washington. It doesn't seem to matter to Wall Street because they own both parties.
EMAIL TO A FRIEND X
Your Email has been sent.
You must add at least one tag to this diary before publishing it.

Add keywords that describe this diary. Separate multiple keywords with commas.
Tagging tips - Search For Tags - Browse For Tags

?

More Tagging tips:

A tag is a way to search for this diary. If someone is searching for "Barack Obama," is this a diary they'd be trying to find?

Use a person's full name, without any title. Senator Obama may become President Obama, and Michelle Obama might run for office.

If your diary covers an election or elected official, use election tags, which are generally the state abbreviation followed by the office. CA-01 is the first district House seat. CA-Sen covers both senate races. NY-GOV covers the New York governor's race.

Tags do not compound: that is, "education reform" is a completely different tag from "education". A tag like "reform" alone is probably not meaningful.

Consider if one or more of these tags fits your diary: Civil Rights, Community, Congress, Culture, Economy, Education, Elections, Energy, Environment, Health Care, International, Labor, Law, Media, Meta, National Security, Science, Transportation, or White House. If your diary is specific to a state, consider adding the state (California, Texas, etc). Keep in mind, though, that there are many wonderful and important diaries that don't fit in any of these tags. Don't worry if yours doesn't.

You can add a private note to this diary when hotlisting it:
Are you sure you want to remove this diary from your hotlist?
Are you sure you want to remove your recommendation? You can only recommend a diary once, so you will not be able to re-recommend it afterwards.
Rescue this diary, and add a note:
Are you sure you want to remove this diary from Rescue?
Choose where to republish this diary. The diary will be added to the queue for that group. Publish it from the queue to make it appear.

You must be a member of a group to use this feature.

Add a quick update to your diary without changing the diary itself:
Are you sure you want to remove this diary?
(The diary will be removed from the site and returned to your drafts for further editing.)
(The diary will be removed.)
Are you sure you want to save these changes to the published diary?

Comment Preferences

Alumbrados, Angie in WA State, cslewis, chuck utzman, PeterHug, karlpk, Shockwave, Wintermute, RFK Lives, expatjourno, zeitshabba, niemann, Creosote, rasbobbo, TracieLynn, susakinovember, whenwego, Agathena, jalbert, Nate Roberts, kharma, tidalwave1, psnyder, emmasnacker, NYC Sophia, Dallasdoc, mrkvica, CitizenOfEarth, Chirons apprentice, lcrp, dkmich, zerelda, Steven D, jcrit, vacantlook, sachristan, davidincleveland, G2geek, 3goldens, caul, LarisaW, unclejohn, sc kitty, corvo, grimjc, ChemBob, fixxit, Kayakbiker, lotlizard, Sandino, Tunk, WisePiper, peacestpete, Alan Arizona, xaxnar, Jim P, third Party please, Arabiflora, cookseytalbott, AoT, Lefty Coaster, blueoasis, triv33, StrayCat, JVolvo, joe shikspack, happy camper, Preston S, Turbonerd, thenekkidtruth, Clive all hat no horse Rodeo, shaharazade, NancyWH, kurious, Friend of the court, daeros, ammasdarling, Mary Mike, HeartlandLiberal, terabytes, LamontCranston, bnasley, Kentucky Kid, letsgetreal, SeaTurtle, bobswern, Don midwest, Empower Ink, cville townie, also mom of 5, flowerfarmer, wayoutinthestix, zerone, Involuntary Exile, elwior, KJG52, Lujane, codairem, Uncle Bob, BYw, billybam, watercarrier4diogenes, tuckerm, J M F, ceebee7, nchristine, lostinamerica, banjolele, Carol in San Antonio, Gorilla in the room, JesseCW, ruscle, Just Bob, parse this, piers, gulfgal98, Kristina40, Egalitare, Funkygal, Johnny Q, Betty Pinson, DrTerwilliker, USHomeopath, Oh Mary Oh, slice, ozsea1, vahana, Bluerall, FarWestGirl, Nicci August, Teiresias70, marleycat, PorridgeGun, Wolf10, BarackStarObama, Eric Stetson, Book of Hearts, DRo, SouthernLiberalinMD, Azazello, Laurel in CA, wolf advocate, 420 forever, FreeSpeaker, BusyinCA, George3, Australian2, nuclear winter solstice, Lily O Lady, Blue Bell Bookworm, jusjtim35, countwebb, jbob, JayRaye, eyo, goodpractice, Pablo Bocanegra, hbk, Older and Wiser Now, laughingRabbit

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site