Fed trumps Trump as dollar, US Treasury yields soar

LONDON - The dollar and U.S. Treasury yields jumped on Wednesday, while stocks were mixed, as investors focused less on U.S. President Donald Trump's first speech to Congress and more on what they see as a growing chance of a U.S. interest rate hike this month.

Trump took a measured tone in his keenly awaited speech on Tuesday, saying he was open to immigration reform, but failing again to provide much detail on his plans for tax reform and infrastructure spending.

For markets, the speech was overshadowed by comments from a handful of Federal Reserve policymakers, who suggested rate-setters are worried about waiting too long to raise interest rates in the face of pending economic stimulus from Washington.

New York Fed President William Dudley -- one of the most influential U.S. central bankers, and usually considered a dove -- said the case for tightening monetary policy had become "a lot more compelling", while San Francisco Fed President John Williams said he saw "no need to delay" raising rates.

Having priced in only around a 30 percent chance that the Fed would move this month before the Fed comments, investors moved to price in around a 68 percent probability of a March hike, according to Reuters data. By June, an 84 percent chance of at least one hike has now been priced in.

The dollar index, which measures the greenback against a basket of other major currencies, climbed as much as 0.7 percent to its highest levels in seven weeks, having also been helped by data showing robust U.S. consumer spending.

Two-year U.S. Treasury yields jumped to 1.304 percent, the highest since December, to match their highest levels since 2009. The gap between them and their German equivalents increased to its widest since 2000.

"After dominating the markets since November, President Trump could now fade into the background as the focus shifts to the Fed and the prospect of rate increases," said Kathleen Brooks, Research Director at City Index in London.

"Fed members don't just let words slip out when they speak to the press - this was a message for the markets, and the markets have duly reacted."

SHORT ON DETAIL

European shares gained, with basic resources the top-performers on Trump's promise of $1 trillion of infrastructure spending.

The pan-European STOXX 600 index rose 1 percent, with Germany's DAX and France's CAC 40 outperforming peers to climb 1.3 percent and 1.4 percent respectively, helped by strong company earnings reports.

The global MSCI ACWI index, which has risen more than 10 percent since Trump's election in November, was flat, with gains in Europe offsetting earlier falls on Asian and U.S. bourses. The MSCI's broadest index of Asia-Pacific shares outside Japan dipped 0.2 percent.

Trump pledged to overhaul the immigration system, improve jobs and wages for Americans and deliver "massive" tax relief to the middle class and tax cuts for companies, but offered few clues on how they would be achieved.

"The market has been looking for reassurance that Trump intends to follow through on his campaign promises for fiscal spending, tax cuts and deregulation," said James Woods, global investment analyst at Rivkin in Sydney.

"He mentioned these policies but did not provide any actual details or time lines, which is what investors are looking for."

U.S. stock futures still pointed to a higher open after Trump's address. E-mini S&P futures ES1 rose 0.5 percent, after the Dow Jones Industrial Average snapped a 12-day winning streak to close down 0.1 percent in the prior session.

A raft of surveys pointing to stronger factory activity in China, Japan and other parts of Asia were largely overshadowed by Trump's speech.

In commodity markets, crude oil prices lost more ground, with rising U.S. oil output adding pressure on the market, although OPEC production cuts continued to offer support.

The stronger dollar weighed on gold, which dropped 0.3 percent to 1,244.36 an ounce, extending Tuesday's decline.

source: news.abs-cbn.com

NY Fed, Bangladesh central bank to resume normal money transfers - sources

NEW YORK - The Federal Reserve Bank of New York and Bangladesh's central bank have agreed to withdraw additional payment security measures put in place after one of the world's biggest cyber heists, the theft of $81 million from Bangladesh Bank's account at the Fed, two sources said.

The decision comes after SWIFT, the global financial messaging platform, promised in May to strengthen security on software tools used by its clients and to develop new tools that would spot a compromised account and raise a red flag when a payment instruction deviates from normal patterns.

The decision was taken at a meeting in New York this week between officials from Bangladesh Bank, the New York Fed and SWIFT, said a source close to Bangladesh Bank who has direct knowledge of the matter. They have agreed on a tentative timeline to withdraw the additional security measures but the source declined to give details.

"(The New York Fed and Bangladesh Bank) want to use (only) SWIFT for secure communication," said the source, declining to be named as he was not authorised to brief the media. "We are talking about normalising our communication channels as soon as possible."

The New York Fed and SWIFT could not immediately be reached for comment.

In early February, hackers used stolen Bangladesh Bank credentials to send three dozen SWIFT messages to transfer nearly $1 billion from its Fed account, eventually managing to route $81 million to a bank in the Philippines. Most of the money was laundered through casinos in Manila and remains missing.

Following the heist, Bangladesh Bank initiated a new protocol under which the Fed could only clear any SWIFT request from Dhaka after a voice authentication. Fed officials had to call one of two or three Bangladesh Bank officials whose voice samples were shared with the Fed.

A senior Bangladesh Bank official in Dhaka, who declined to be named, said more time was needed "to improve the system" before moving back to a SWIFT-only transfer mechanism.

Both sources said the New York Fed wanted to do away with the additional measure as it delayed genuine transfer instructions.

SWIFT has told Bangladesh Bank its system was secure and that the Asian bank needed to tighten its own defenses to prevent criminals from hacking into their computer systems.

Bangladesh Bank spokesman Subhankar Saha said he was not aware of the agreement and would comment only after the bank's delegation came back from the United States.

The bank said in a statement on Wednesday that its officials discussed with the New York Fed and SWIFT "certain technical details" of the heist to enhance their understanding of how the fraud occurred and "steps that have been and will be taken to remediate the event."

The Bangladeshi delegation also requested the New York Fed to put more pressure on the Philippines' Rizal Commercial Banking Corp (RCBC), to recover the rest of the stolen money, said the source close to Bangladesh Bank. The funds were routed to four accounts at the bank before they disappeared into casinos in the city.


The New York Fed in June wrote to the Philippines' central bank, prodding it to help Bangladesh Bank retrieve the money.

Bangladesh Bank officials believe the nudge from the Fed was one of the reasons the Philippines central bank this month slapped a record fine of P1 billion ($21 million) on RCBC in connection with the heist.

source: www.abs-cbnnews.com

Bangladesh Bank officials say to meet NY Fed, SWIFT; seek to recover stolen money

DHAKA - Bangladesh's central bank chief will meet the head of the Federal Reserve Bank of New York and a senior executive from global financial messaging service SWIFT next week to seek the recovery of about $81 million stolen by hackers, officials in Dhaka said.

Two Bangladesh Bank officials said the bank believed both the New York Fed and SWIFT bore some responsibility for the February cyber heist. The officials spoke on condition of anonymity since they were not authorized to brief the media.

The bank's governor Fazle Kabir, New York Fed President William Dudley and a SWIFT representative will meet in Basel, Switzerland around May 10, they and another person briefed by the central bank said. It was not immediately clear who would represent SWIFT.

Spokeswomen for SWIFT and the New York Fed declined comment.

Hackers tried to steal nearly $1 billion from Bangladesh Bank's settlement account at the New York Fed in early February by sending fraudulent transfer orders through SWIFT.

Of the 35 transfer orders sent, 30 were blocked. Four transfers to a Philippine bank for a total of $81 million went through while a $20 million transfer to a Sri Lankan company was reversed because the hackers mis-spelled the name of the firm.

"There is a responsibility the New York Fed has to accept," said one of the Bangladesh Bank officials. "If you stopped 30 transactions, why did you not stop the others?

"SWIFT also bears responsibility," the official said. "It's supposed to be a closed system. Now you have seen they have disclosed that there have been attacks previously on its software."

Last week, SWIFT acknowledged that the Bangladesh Bank attack was not an isolated incident but one of several recent criminal schemes that aimed to take advantage of the global messaging platform used by about 11,000 financial institutions.

The other Bangladesh Bank official said lawyers would be present at the meeting. Ajmalul Hussain, a Dhaka-based lawyer hired by the central bank to help it retrieve the funds, could not be reached for comment. His office said he was out of the country.

It was not immediately known if Bangladesh Bank had retained any U.S. or European law firm to help recover the money.

However the bank said in an internal report in March it was considering "preparing the ground to make a legitimate claim for the loss of funds" against the New York Fed "through a legal process."

Both central bank officials said Kabir, the governor, would be accompanied by an official from the accounts and budgeting department on the trip to Basel and would seek the recovery of the stolen funds.

Basel is the headquarters of the Bank for International Settlements, a group of major central banks.

The stolen $81 million was sent to a bank in the Philippines and quickly passed on to casinos and casino agents. Most of it remains missing. However, one junket operator has returned about $10 million to authorities in Manila and promised to hand over another $5 million.

One of the Bangladesh Bank officials expressed confidence that there would be a resolution to the dispute soon, though he didn't provide any evidence for the optimism.

source: www.abs-cbnnews.com

Bangladesh Bank exposed to hackers by cheap switches, no firewall: police

DHAKA -- Bangladesh's central bank was vulnerable to hackers because it did not have a firewall and used second-hand, $10 switches to network computers connected to the SWIFT global payment network, an investigator into one of the world's biggest cyber heists said.

The shortcomings made it easier for hackers to break into the Bangladesh Bank system earlier this year and attempt to siphon off nearly $1 billion using the bank's SWIFT credentials, said Mohammad Shah Alam, head of the Forensic Training Institute of the Bangladesh police's criminal investigation department.

"It could be difficult to hack if there was a firewall," Alam said in an interview.

The lack of sophisticated switches, which can cost several hundred dollars or more, also means it is difficult for investigators to figure out what the hackers did and where they might have been based, he added.

Experts in bank security said that the findings described by Alam were disturbing.

"You are talking about an organization that has access to billions of dollars and they are not taking even the most basic security precautions," said Jeff Wichman, a consultant with cyber firm Optiv.

Tom Kellermann, a former member of the World Bank security team, said that the security shortcomings described by Alam were "egregious," and that he believed there were "a handful" of central banks in developing countries that were equally insecure.

Kellermann, now chief executive of investment firm Strategic Cyber Ventures LLC, said that some banks fail to adequately protect their networks because they focus security budgets on physically defending their facilities.

POLICE BLAME BANK, SWIFT

Cyber criminals broke into Bangladesh Bank's system and in early February tried to make fraudulent transfers totalling $951 million from its account at the Federal Reserve Bank of New York.

Most of the payments were blocked, but $81 million was routed to accounts in the Philippines and diverted to casinos there. Most of those funds remain missing.

The police believe that both the bank and SWIFT should take the blame for the oversight, Alam said in an interview.

"It was their responsibility to point it out but we haven't found any evidence that they advised before the heist," he said, referring to SWIFT.

A spokeswoman for Brussels-based SWIFT declined comment.

SWIFT has previously said the attack was related to an internal operational issue at Bangladesh Bank and that SWIFT's core messaging services were not compromised.

A spokesman for Bangladesh Bank said SWIFT officials advised the bank to upgrade the switches only when their system engineers from Malaysia visited after the heist.

"There might have been a deficiency in the system in the SWIFT room," said the spokesman, Subhankar Saha, confirming that the switch was old and needed to be upgraded.

"Two (SWIFT) engineers came and visited the bank after the heist and suggested to upgrade the system," Saha said.

GLOBAL WHODUNIT

The heist's masterminds have yet to be identified.

Bangladesh police said earlier this week they had identified 20 foreigners involved in the heist but they appear to be people who received some of the payments, rather than those who initially stole the money.

Bangladesh Bank has about 5,000 computers used by officials in different departments, Alam said.

The SWIFT room is roughly 12 feet by 8 feet, a window-less office located on the eight floor of the bank's annex building in Dhaka. There are four servers and four monitors in the room.

All transactions from the previous day are automatically printed on a printer in the room.

The SWIFT facility should have been walled off from the rest of the network. That could have been done if the bank had used the more expensive, "managed" switches, which allow engineers to create separate networks, said Alam, whose institute includes a cyber-crime division.

Moreover, considering the importance of the room, the bank should have deployed staff to monitor activity round the clock, including weekends and holidays, he said.

source: www.abs-cbnnews.com

RCBC's key shareholders increase stakes

MANILA  - Rizal Commercial Banking Corp.'s (RCBC) two biggest shareholders have bought an extra $9.48 million worth of stock, taking their combined stakes to 65.02 percent, the Philippine lender said in a stock exchange filing on Wednesday.

RCBC is at the center of a Senate investigation into a cyber heist in which $81 million stolen from the Bangladesh Bank's account at the U.S. Federal Reserve Bank of New York was allegedly deposited at RCBC.


In the filing, RCBC said top shareholder Pan Malayan Management and Investment Corp last week bought 8.8 million shares at 30 pesos apiece, raising its stake to 42.31 percent from 41.68 percent.

Taiwan's Cathay Life Insurance, a subsidiary of Cathay Financial Holding Co Ltd, bought 5.8 million shares also at 30 pesos apiece, taking its stake to 22.71 percent from 22.3 percent.

The price of RCBC shares fell to as low as 28.75 pesos last month after the bank was placed under investigation. The stock fell as much as 3.8 percent to 30.70 in Wednesday morning trade, versus a 0.6 percent decline in the broader market.

"The principals are very confident of the bank. They used their cash to buy out investors that wanted to exit," said Augusto Cosio, president at fund manager First Metro Asset Management.

RCBC's reputation may have suffered from the heist, but its balance sheet remains attractive given its clients and depositors, Cosio said.

A spokesman at Cathay Financial told Reuters it was "confident in (RCBC's) chairman and management team."

"The Philippines' market is booming. It is only one of its branches that is being investigated. And RCBC is fully cooperating with investigators," the spokesman said.

Unidentified hackers allegedly stole the money in early February and channelled it to casinos and gambling agents in the Philippines via a Manila branch of RCBC.

RCBC launched its own investigation and filed a case against two former employees.

source: www.abs-cbnnews.com

Bangladesh seeks FBI's help in investigating central bank heist

DHAKA - Bangladesh has formally sought assistance from the U.S. Federal Bureau of Investigation to track down the cyber crooks who stole $81 million from its central bank's U.S. account, the interior minister said on Saturday.

Unknown hackers breached the computer systems of Bangladesh Bank in early February and attempted to steal $951 million from its account at the Federal Reserve Bank of New York, which it uses for international settlements.

Some attempted transfers were blocked, but $81 million was transferred to accounts in the Philippines in one of the largest cyber heists in history.

The central bank governor resigned on Tuesday, as details emerged in the Philippines that $30 million of the money was delivered in cash to a casino junket operator in Manila, while the rest went to two casinos.

"We sought the FBI's assistance when a group of FBI met with me for investigating the central bank heist last month," Interior Minister Asaduzzaman Khan told Reuters.

An U.S. embassy official in Dhaka told Reuters Washington stood ready to assist the government of Bangladesh in its investigation.

A senior police official involved in the investigation said that an FBI team was expected to visit the Criminal Investigation Department (CID) of police in Dhaka on Sunday. The CID was also coordinating with Interpol to track down the perpetrators.

"We are trying to find out what type of security there was, what safety measures were taken, and how the thieves penetrated the fire wall," he said.

The chief of the main opposition Bangladesh Nationalist Party said on Saturday that if elected her party would ensure real autonomy for the central bank.

"There will be no interference or influence from the political party," Begum Khaleda Zia said at a party conference.

A central bank official said two engineers from secure network operator SWIFT (the Society for Worldwide Interbank Financial Telecommunication) had started tests on Saturday.

He said the system would be upgraded if needed.

"Bangladesh is a member of the SWIFT society, so we use its service for international transactions," the official added.

(Reporting by Serajul Quadir; Editing by Ros Russell and Catherine Evans)

source: www.abs-cbnnews.com

Faulty printer implicated in $81-M bank heist

DHAKA, Bangladesh - A printer fault at Bangladesh's central bank meant that overseas queries about suspicious transactions went unanswered, according to a report seen by AFP Wednesday on the $81 million cyber heist that sent shockwaves through the banking world.

The report, filed to police on Tuesday, recounts the events leading to the discovery of the dramatic theft from an overseas account of Bangladesh Bank.

It says that because of a printer and software problem, it took the Bangladesh central bank nearly four days to ask banks across the globe to halt payments to the hackers.

They tried to steal around $1 billion and got away with $81 million from the impoverished country's coffers.

How a hacker's typo helped stop a billion dollar bank heist

Central bank governor Atiur Rahman and two of the deputy governors have lost their jobs over the scandal, which has hugely embarrassed the government and raised alarm over the security of the country's foreign exchange reserves of over $27 billion.

On Wednesday the government, which has said it was kept in the dark about the losses for weeks, also removed its most senior banking official M. Aslam Alam from his position.

The hackers managed to transfer $81 million on February 5 -- a Friday, when Bangladesh Bank is closed -- from its account with the Federal Reserve Bank of New York, transferring the cash electronically to accounts in the Philippines.

In the report seen by AFP, the bank's joint director Zubair bin Huda said engineers were unable to fix the printers until February 6, a day after the New York bank sent queries about four separate transactions.

"Since such glitches happened before, we thought it was a common problem just like any other day," Huda said in the report.

Bangladesh Bank tried to contact New York on February 6 by email, fax and phone to ask that the transactions be suspended when it realized that the SWIFT interbank messaging system which it normally used was not working properly, Huda said.

"We realized that the SWIFT system being ineffective was an important issue, and therefore we sent an email to Federal Reserve Bank of New York at 1:30pm on February 6 to halt all types of payment processing," he said.

But they were unable to get through as the US bank was closed for the weekend.

It was not until Monday afternoon that the central bank's main server was again working properly and officials were able to send the formal requests to stop the payments to six banks across the globe.

But by that time $81 million had been transferred from Bangladesh Bank's New York account to a bank in the Philippines.

PHILIPPINES ACCOUNT

The money was later transferred to an account belonging to ethnic Chinese businessman William So Go, a Philippine Senate committee heard this week.

The money was then transferred to Philippine casinos, Julia Bacay-Abad from the Philippines' anti-money laundering council told the hearing on Tuesday.

Go's lawyer said the businessman's signatures for his now-frozen RCBC account, which were used to transfer the money, had been forged.

'Money trail in laundering scam ends with casinos'

Casino junket operator got $30-M in cash

Another transfer of $20 million was halted by a bank in Sri Lanka at Bangladesh Bank's request.

As details of the scandal emerged last week, Bangladesh Finance Minister A.M.A. Muhith threatened to sue the New York Fed.

The US-based bank said in a statement on its website that the payment instructions "were fully authenticated by the SWIFT messaging system in accordance with standard authentication protocols".

LACK OF TRANSPARENCY

Meanwhile, the $81 million heist has also put a spotlight on the Philippines' strict bank secrecy law. Finance Secretary Cesar Purisima earlier said the Philippines along with Lebanon are some of the only countries in the world left with a bank secrecy law.

Even Switzeland, which is known for its strict banking system, has been open to relax the law.

PH one of few countries with bank secrecy law

According to a law enacted in 1955, all bank deposits in the Philippines are absolutely confidential and may not be examined "except upon written permission of the depositor, or in cases of impeachment, or upon order of a competent court in cases of bribery or dereliction of duty of public officials, or in cases where the money deposited or invested is the subject matter of the litigation."

Last year, Internal Revenue Commissioner Kim Henares said the government is preparing a draft bill that would lift or ease the bank secrecy law to strengthen government's tax collection efforts. Congress, however, thumbed it down.

Makati Business Club chairman Ramon del Rosario said he found it "uncomfortable" that the bank secrecy law was invoked during the Senate investigation on the $81 million heist.

Senator Sergio Osmena III said the international financial community has already taken notice of loopholes in Philippine laws.

"As far as I am concerned, sunlight is the best medicine. Transparency in a democratic setting is the best safeguard against corruption and against bad public officials," he said.

“Despite all the warnings from the FATF (Financial Action Task Force), we still don’t have the political will to plug those loopholes. I hope that this will teach us a lesson because the international financial community has just taken notice of how big our loopholes are and it’s become an international incident because [81 million] dollars was hacked from the account of Bangladesh Central Bank and laundered through the Philippine financial system." With Agence France-Presse

Osmena: Political will needed to plug laundering loopholes

source: www.abs-cbnnews.com

Bangladesh bank says hackers tried to steal $951 million

DHAKA - Bangladesh's central bank confirmed on Sunday that cyber criminals tried to withdraw $951 million from its U.S. bank account, as the country's finance minister said he first got to know of one of the biggest bank heists in history through the media.

Unknown hackers breached the computer systems of Bangladesh Bank, and transferred $81 million from its account at the Federal Reserve Bank of New York to casinos in the Philippines between Feb. 4 and Feb. 5.

Finance Minister Abul Maal Abdul Muhith said the central bank did not inform him about the heist, and that he learned of it only a month later when news first appeared in the media.

"I am very much unhappy about the handling of the issue," he told reporters in his office in Dhaka.

He said he planned to meet Prime Minister Sheikh Hasina on Sunday and decide what action to take against central bank officials.

The cyber heist and its global scale has left Bangladesh officials scrambling to find answers and recover the money that was lost.

The incident has also left other banks and businesses around the world eager to learn more, so they can review their own networks for signs that they are vulnerable to similar attacks or might already have been breached.

Bangladesh Bank said in a Facebook post that hackers made 35 separate requests to withdraw money from its Fed account, totalling $951 million, confirming earlier reports.

Officials have said the account, used for international settlements, had billions of dollars.

Bangladesh officials expect that it would be difficult to recover the money that has already gone out of the banking channels.

Officials have said that the money that made its way to the Philippines was further diverted to casinos and then possibly on to Hong Kong.

After a meeting with the investigators and central bank officials on Sunday, Mohammad Aslam Alam, the secretary of the banking division of the ministry of finance, said recovery could take months.

But he added that the Philippines had managed to freeze $68,000, which Dhaka should be able to recover.

The Bangladesh Nationalist Party (BNP), the largest opposition party, demanded the resignation of the central bank governor and the finance minister.

source: www.abs-cbnnews.com

How a hacker's typo helped stop a billion dollar bank heist

DHAKA - A spelling mistake in an online bank transfer instruction helped prevent a nearly $1 billion heist last month involving the Bangladesh central bank and the New York Fed, banking officials said.

Unknown hackers still managed to get away with about $80 million, one of the largest known bank thefts in history.

The hackers breached Bangladesh Bank's systems last month and stole its credentials for payment transfers, two senior Bangladesh Bank officials said.

They then bombarded the Federal Reserve Bank of New York with nearly three dozen requests to move money from the Bangladesh bank's account there to entities in the Philippines and Sri Lanka, the officials said.

Four requests to transfer a total of about $81 million to the Philippines went through, but a fifth, for $20 million, to a Sri Lankan non-profit organisation got held up because the hackers misspelled the name of the NGO.

The full name of the non-profit could not be learned. But one of the officials said the hackers misspelled "foundation" in the NGO's name as "fandation", prompting a routing bank, Deutsche Bank, to seek clarification from the Bangladesh central bank, which stopped the transaction.

Deutsche Bank declined to comment.

At the same time, the unusually high number of payment instructions and the transfer requests to private entities - as opposed to other banks - made the Fed suspicious, which also alerted the Bangladeshis, the officials said.

The details of how the hacking came to light and was stopped before it did more damage have not been previously reported.

Bangladesh Bank has billions of dollars in a current account with the Fed, which it uses for international settlements.

The transactions that got stopped totalled between $850 million and $870 million, one of the officials said.

Last year, Russian computer security company Kaspersky Lab said a multinational gang of cyber criminals had stolen as much as $1 billion from as many as 100 financial institutions around the world in about two years.

Iraqi dictator Saddam Hussein's son Qusay took $1 billion from Iraq's central bank on the orders of his father on the day before coalition forces began bombing the country in 2003, American and Iraqi officials have said. In 2007, guards at the Dar Es Salaam bank in Baghdad made off with $282 million.

MONEY RECOVERED

Bangladesh Bank has said it has recovered part of the money that was stolen, and is working with anti-money laundering authorities in the Philippines to try to recover the rest of the funds.

The recovered funds refer to the Sri Lanka transfer, which got stopped, one of the officials said.

The dizzying, global reach of the heist underscores the growing threat of cyber crime and how hackers can find weak links in even the most secure computer networks to steal money and wreak havoc.

More than a month after the attack, Bangladeshi officials are scrambling to trace the money, shore up security and identify weaknesses in their systems. They said there is little hope of ever catching the hackers, and it could take months before the money is recovered, if at all.

Security experts said the perpetrators had deep knowledge of the Bangladeshi institution's internal workings, likely gained by spying on bank workers.

The Bangladesh government, meanwhile, is blaming the Fed for not stopping the transactions earlier.

Finance Minister Abul Maal Abdul Muhith told reporters on Tuesday that the country may resort to suing the Fed to recover the money.

"The Fed must take responsibility," the minister said.

The New York Fed has said that its systems were not breached and that it has been working with the Bangladesh central bank since the incident occurred.

The hacking of Bangladesh Bank happened sometime between Feb. 4 and Feb. 5, over the Bangladeshi weekend, which falls on a Friday, the officials said. The bank's offices were shut for the holiday.

Initially, the central bank was not sure if their system had been breached, but then cyber security experts, brought from the outside to investigate, found hacker "footprints" that suggested their system had been compromised, the officials said.

These experts could also tell that the attack originated from outside Bangladesh, they said. The bank is still looking into how they got into the system and an internal investigation is also continuing, they said.

The bank suspects money sent to the Philippines was further diverted to casinos there, the officials said.

The Philippine Amusement and Gaming Corp, which oversees the gaming industry there, said it has launched an investigation. The country's anti-money laundering authority is also working on the case.

source: www.abs-cbnnews.com

Household debt rises at fastest pace since global financial crisis

Families boosted their borrowing late last year at the fastest pace since the global financial crisis, a sign that Americans are gradually reopening their wallets as they feel more secure in their jobs.

Household debt jumped $241 billion to $11.5 trillion in the fourth quarter, the biggest increase since the third quarter of 2007, according to data released Tuesday by the Federal Reserve Bank of New York.

"This quarter is the first time since before the Great Recession that household debt has increased over its year-ago levels, suggesting that after a long period of de-leveraging, households are borrowing again," said Wilbert van der Klaauw, an economist at the New York Fed.

The pickup in debt was a welcome development after a string of disappointing economic reports in the last few weeks.

After several years of languid growth, experts predicted, the U.S. economy would finally hit the sort of cruising speed in 2014 that has been typical in past recoveries.

But job growth, auto sales and industrial production all have been disappointing lately. A trade group said Tuesday that an index of home-builder confidence suffered its worst drubbing last month since the gauge was created nearly 30 years ago.

The weak data are partly the result of the frigid temperatures draping much of the Midwest and East Coast. But economists still worried that economic progress would remain spasmodic for another year.

Recent data on household debt figures relieved some of that fear. Consumers' increased borrowing should translate to improved spending when the snow and ice melt, experts say.

"The fact that people are borrowing more is a positive sign that they have more confidence in the economy and their jobs," said Gary Thayer, an economist at Wells Fargo Advisors in St. Louis. "They're starting to buy homes and cars again. These are good things for the economy."

Auto debt rose to $863 billion in 2013, up $18 billion in the fourth quarter and $80 billion for the year, according to the New York Fed. Credit card debt inched up $11 billion in the fourth quarter to $683 billion.

Economists generally have downplayed the weak economic data this year, saying the punishing weather has slowed auto sales and home purchases.

"Who goes to look for a home or walks into a dealership in this weather?" said Diane Swonk, chief economist at Mesirow Financial in Chicago. "Once the weather warms up, so will the economy."

Of course, not all businesses can recoup sales lost to inclement conditions.

"If you don't go out to a restaurant, it doesn't mean you'll eat twice as many hamburgers when you go out to eat the next month," said Chris Christopher, an economist at IHS Economics.

There are still plenty of signs pointing to the fragility of consumer habits.

The $241-billion rise in household borrowing was paced by a $152-billion pickup in mortgage debt. But that stemmed largely from a decline in foreclosures rather than a surge in home sales.

Mortgage originations fell $97 billion to $452 billion at the end of the year as home buyers pulled back in the face of higher interest rates. Student-loan debt continued to barrel higher, ballooning $53 billion in the fourth quarter to $1.1 trillion.

The $11.5 trillion in current household borrowing remains 9.1% below its pre-crisis peak of $12.7 trillion.

Other data Tuesday underscored the financial strains on working people.

Barely half the U.S. population has more in emergency savings than in credit card debt, according to a poll by financial website Bankrate.com.

Only 51% of respondents said they have more in a rainy-day fund than in credit card debt. That's the lowest level since the financial research firm began its survey in 2011.

Of those polled, 28% said they owe more on their cards than they have in savings. An additional 17% said they have no credit card debt but no emergency fund either.

People between the ages of 30 and 64 are most likely to have more debt than emergency savings, according to the survey. Those are prime working years, when people are most likely to need a rainy-day reserve to cover an unexpected job loss or financial setback.

"This is a reflection of the stagnant incomes, long-term unemployment and high household expenses that are hampering the financial progress of many Americans," said Greg McBride, Bankrate.com's chief financial analyst.

source: latimes.com

4 Tips to Help 30-Somethings Handle Student Loan Debt

By the time most college graduates reach their 30s, they've been dealing with student loans for years. Yet increasingly, even 30-somethings still face big challenges from their outstanding college debts, and those challenges are affecting the way they manage the rest of their financial lives. Homeownership rates among 30-year-olds have fallen much more dramatically since 2008 for those with student loan debt than for those without it, according to a recent Federal Reserve Bank of New York study.



Yet many people in their early 30s have either already started a family or plan to do so in the near future. That raises the question of how to balance your own financial needs against those of your children in order to reduce the odds that your kids will suffer under the crippling weight of excessive student loans of their own.

Let's look at some tips for getting your own debt paid down and for preparing for potential family educational costs down the road.

1. Put Student Loans in Their Place.

Many borrowers assume that they should always pay down their student loans as quickly as possible. Yet even though paying off those loans can give you a psychological boost, it's not necessarily the smartest move if you have other debt with less generous terms and higher finance charges. By understanding the terms of your student loans as well as credit-card agreements, car loans, mortgages, and other debt you might have, you can identify the highest-cost debt you have and prioritize getting that paid off first. Even if that means waiting longer to retire your student loans, doing so will still save you money in the long run.

2. Don't Skimp on Savings.

Whether to put money toward savings and investing when you have outstanding student loan debt is a subject of debate, with good arguments on both sides.

But to take advantage of the tax deductions and free employer-matching contributions you get from contributing to a retirement account, it's worth diverting extra money away from paying down student loans, especially those with low interest rates in the 3 percent to 4 percent range. As your income increases, you'll be able both to stay current on your loan obligations and to set money aside for other important financial goals.

3. Make Your Employer Pay for More School.

As you advance in your career, getting more education and boosting your skills might be a lucrative move. But once you're in the workforce, you don't necessarily have to pay for those classes yourself anymore. Many employers have recognized the value of investing in their employees through tuition reimbursement programs, which will pay you back for all or part of your costs. Availability and conditions differ from company to company, and typically, the education has to be connected to your job. But they're a great way to avoid adding to your student loan debt.

4. Don't Let Student Loan Debt Hit You Twice.

As heavy a burden as today's young graduates carry, educational debt among their parents is also reaching epidemic levels. In 2011, parents received $10.6 billion in Parent PLUS loans, a 145 percent increase since 2000, even adjusted for inflation, according to a study from The Chronicle of Higher Education and ProPublica. And the size of average individual loan is up as well, by about a third to nearly $12,000 in constant dollars. If you have kids or plan to, you'll want to take steps to ensure you don't end up facing a huge loan burden a second time around.

Put time on your side by setting up savings programs for their college educations now. As your income grows and you rise into higher tax brackets, the advantages of using a tax-favored college savings strategy such as a 529 plan increase in value. As with any market-based investment and saving strategy, 529 plans work best when you give them as much time as possible to produce strong returns. Moreover, 529 plans have very small minimum starting investments, so you can start a account without placing too big a burden on your finances.

source: dailyfinance.com