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Phishing in Smooth Waters: The State of Banking Certificates in the US

January 26, 2015 Comments off

Phishing in Smooth Waters: The State of Banking Certificates in the US
Source: Social Science Research Network

A critical component of the solution to online masquerade attacks, in which criminals create false web pages to obtain financial information, is the hierarchy of public key certificates. Masquerade attacks include phishing, pharming, and man-in-the-middle attacks. Public key certificates ideally authenticate the website to the person, before the person authenticates to the website. Public key certificates are typically issued by certificate authorities (CAs).

Banks are the most common target of phishing attacks, so we implemented an empirical study of certificates for depository institutions insured by the Federal Depository Insurance Corporation (FDIC) and compared them to general purpose, non-banking certificates. Our study of websites of FDIC-insured banks found that the current configuration fails to support website authentication. The most common failure is an absence of certificates, meaning that a false certificate would be the only valid-named certificate for that institution. Certificates with incorrect names, incorrectly structured certificates, and shared certificates all plague online banking. The vast majority of banks, especially smaller banks, apparently lack the expertise, support, or incentive to implement certificates correctly.

We document the current state of bank certificates. We compare these with general-purpose certificates (e.g., the top one million websites). We survey the various proposals for the certificate market writ large, including pinning and notaries. We identify how those fit and fail to fit the unique problem of banking certificates. We close with policy and technical recommendations to alter the use of certificates so that these can be a valid basis for consumer trust.

Getting to the Route of It: The Role of Governance in Regional Transit

January 21, 2015 Comments off

Getting to the Route of It: The Role of Governance in Regional Transit
Source: Eno Center for Transportation

Metropolitan regions are the economic engines of our nation and public transit is the machinery that enables the largest metropolitan areas to function, compete effectively for employers and labor, and foster innovation. The ability of transit organizations to respond to changing and expanding demands varies across the industry and is shaped to a large extent by individual governance and organizational structures. Each type of governance structure has its own implications for funding, equitable and effective service patterns, and economic growth.

See also: APPENDIX–Getting to the Route of It: The Role of Governance in Regional Transit

SEC Announces Charges Against Standard & Poor’s for Fraudulent Ratings Misconduct

January 21, 2015 Comments off

SEC Announces Charges Against Standard & Poor’s for Fraudulent Ratings Misconduct
Source: U.S. Securities and Exchange Commission

The Securities and Exchange Commission today announced a series of federal securities law violations by Standard & Poor’s Ratings Services involving fraudulent misconduct in its ratings of certain commercial mortgage-backed securities (CMBS).

S&P agreed to pay more than $58 million to settle the SEC’s charges, plus an additional $19 million to settle parallel cases announced today by the New York Attorney General’s office ($12 million) and the Massachusetts Attorney General’s office ($7 million).

“Investors rely on credit rating agencies like Standard & Poor’s to play it straight when rating complex securities like CMBS,” said Andrew J. Ceresney, Director of the SEC Enforcement Division. “But Standard & Poor’s elevated its own financial interests above investors by loosening its rating criteria to obtain business and then obscuring these changes from investors. These enforcement actions, our first-ever against a major ratings firm, reflect our commitment to aggressively policing the integrity and transparency of the credit ratings process.”

2014 Catalyst Census: Women Board Directors

January 16, 2015 Comments off

2014 Catalyst Census: Women Board Directors
Source: Catalyst
From press release:

For the first time, Catalyst takes its 2014 Catalyst Census: Women Board Directors global, as the call for gender equality on boards grows worldwide. Created in partnership with The Data Morphosis Group, the new and expanded Census focuses on women’s share of board seats at stock market index companies across three regions and 20 countries, including the United States, Canada, Europe (14 countries), and Asia-Pacific (Australia, Hong Kong, India, and Japan).

Among the findings:

  • North America: Women hold 19.2% of S&P 500 board seats in the United States; and 20.8% of S&P/TSX 60 board seats in Canada.
  • Europe: Women’s share of board seats ranges from 7.9% in Portugal (PSI-20 index) to 18.5% in Germany (DAX index) to 22.8% in the United Kingdom (FTSE 100 index) to 35.5% in Norway (OBX index).
  • Asia-Pacific: Women’s share of board seats ranges from 3.1% in Japan (TOPIX Core 30 index) to 9.5% in India (BSE 200 index) to 19.2% in Australia (S&P/ASX 200 index).

U.S. Department of State — 2014 Fiscal Transparency Report

January 16, 2015 Comments off

2014 Fiscal Transparency Report
Source: U.S. Department of State

The Department of State hereby presents the findings from the FY 2014 fiscal transparency review process in its Fiscal Transparency Report. This report describes the minimum requirements of fiscal transparency developed by the Department of State in consultation with other relevant federal agencies, identifies governments that are potential beneficiaries of FY 2014 foreign assistance funds, assesses those that did not meet the minimum fiscal transparency requirements, and indicates whether those governments made significant progress towards meeting the requirements.

SEC Announces 2015 Examination Priorities; Priorities Focus on Protecting Retail Investors, Assessing Market-Wide Risks and Using Data Analytics

January 16, 2015 Comments off

SEC Announces 2015 Examination Priorities; Priorities Focus on Protecting Retail Investors, Assessing Market-Wide Risks and Using Data Analytics
Source: U.S. Securities and Exchange Commission

the Securities and Exchange Commission today announced its Office of Compliance Inspections and Examinations’ (OCIE) priorities for 2015 which focus on three areas: protecting retail investors, especially those saving for or in retirement; assessing market-wide risks; and using data analytics to identify signs of potential illegal activity.

The 2015 examination priorities address issues across a variety of financial institutions, including investment advisers, investment companies, broker-dealers, transfer agents, clearing agencies, and national securities exchanges.

CRS — The Effectiveness of the Community Reinvestment Act (January 7, 2015)

January 16, 2015 Comments off

The Effectiveness of the Community Reinvestment Act (PDF)
Source: Congressional Research Service (via Federation of American Scientists)

The Community Reinvestment Act (CRA; P.L. 95-128, 12 U.S.C. §§ 2901-2908) addresses how banking institutions meet credit needs in low- and moderate-income (LMI) neighborhoods. The federal banking regulatory agencies—the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC)—currently implement the CRA. The regulators conduct examinations to evaluate how banks are fulfilling the objectives of the CRA and issue performance ratings. Having a satisfactory or better CRA rating is desirable when banks request to merge with other banking institutions.

Congressional concerns regarding the CRA stem from various perceptions of its effectiveness. Some contend that the CRA creates incentives for banks to make loans to unqualified borrowers likely to have repayment problems, which can translate into losses for lenders. Others are concerned that the CRA is not generating sufficient incentives to increase credit availability to qualified LMI borrowers, which may impede economic recovery for some following the 2007- 2009 recession.

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