Bangladesh’s central bank has apparently had its
account at the New York Fed hacked, with the thieves
absconding with $100 million. The alleged hackers are based in China. Remember that the New York Fed holds primary responsibility within the Federal Reserve System for
monetary policy operations. The New York Fed engages in open market operations, manages the
System Open Market Account,
works with the primary dealers to buy and sell Treasury securities, and is responsible for carrying out foreign exchange operations for both the Federal Reserve System and the US Treasury. The New York Fed also holds
6,350 tons of gold in its gold vault on behalf of both the US government and foreign governments, and provides banking services to foreign central banks and financial institutions. If hackers are able to break into New York Fed accounts and steal money from the accounts of foreign central banks, how can we trust that anything the New York Fed does is secure? How long will it be before we hear about hackers siphoning off money from banks’ excess reserves, or stealing from the Fed’s surplus that it turns over to the Treasury? And if this hack took place a month ago, why are we only finding out about it now?
