the federal deposit insurance corporation ( “ fdic ” ), and the office of the comptroller of the currency ( “ occ ” ), has dealt in some immediate way with the issues posed by electronic and internet banking. both the ots and the board of governors have dealt directly with internet banking through the bank applications approval process. in may of 1995, the ots approved the application of a new thrift, the security first network bank ( “ sfnb ” ), that sought explicitly to provide the majority of its electronic banking services over the internet. 5 in may of 1996, the board of governors approved the application of sfnb ’ s parent, a bank holding company, for sfnb to acquire a data - processing firm specializing in data processing activities that would provide nationwide banking and financial services over the internet. 6 in december of 1996, the board of governors approved the application of a minnesota bank holding company and two foreign banks to join a consortium of 15 north alan greenspan, banking in the global marketplace, address before the federation of bankers associations of japan ( nov. 18, 1996 ). see ots order no. 95 - 88 ( may 8, 1995 ). see cardinal bancshares, inc., 82 fed. res. bull. 674 ( 1996 ). in this board order, the board stated that “ the board believes the provision of computer banking services by sfnb to its customers in accordance with the authority granted by the ots, and as specifically described in this proposal, is consistent with cardinal ’ s existing authority under the [ bank holding company act ] and regulation y to operate a savings association. ” id. at n. 1. american banks and ibm to form integrion financial network, llc. 7 integrion itself has announced that it will not provide electronic or home banking services, but will instead design and operate a secure electronic gateway or interface system linking bank customers to their depository institutions, including links via the internet. 8 finally, the federal reserve bank of new york and the board of governors are currently processing an application from a foreign bank, with a united states securities brokerage subsidiary, to acquire a software firm planning to design software for customers of brokerage firms to place securities buy - and - sell orders over the internet. 9 the occ, meanwhile, confirmed in correspondence in august of 1996 that, in addition to providing home banking services to its customers through the internet, a national bank subsidiary could also provide internet access to

a wire transfer? articles 3, 4 and 4a of the uniform commercial code ( “ ucc ” ) govern the above circumstances, but have nothing to say on internet payments. currently, private contract law governs ; agreements between each of the parties in an on - line transaction should be very carefully drafted and reviewed. still, if internet banking and commercial transactions were to grow in volume and complexity, it is quite possible that private contract law could evolve into a specialized commercial law of cyberspace, and eventually be codified into parts of the ucc. on a less theoretical note, i should mention that a multi - national task force on the security of electronic money, established by the committee on payment and settlement systems and the group of computer experts of the group of ten central bank governors, and chaired by israel sendrovic of the federal reserve bank of new york, issued a report on its findings entitled “ security of electronic money ” in august 1996. this task force examined primarily consumer - oriented stored - value payment products by, among other activities, surveying the leading global suppliers of both card - based and software - based stored - value systems, and concluded that the technical security measures of these systems are being designed to achieve an adequate level of security relative to other forms of common retail payment, assuming they are implemented appropriately. i recommend the report to anyone interested in a general discussion about security issues and stored - value systems, internet - based or not. moving away from consumer banking and the internet, and looking perhaps not - so - distantly into the future, i have also had occasion to question what the repercussions are for large - value payments transfer systems, such as fedwire, with the emergence of a different, much more secure internet. generally speaking, the internet today is a “ somewhat ” secure environment in which to conduct banking and financial service activity. the current level of security is not adequate for large - value payments. some internet - based payment products are becoming more secure, but only after the creators of these products have spent a great deal of time, effort and resources making their products secure. consistent fast transmission and processing are also essential for large - value payments. the internet today has no authorized, universal means of prioritizing specific electronic messages from other messages. faster and better hardware helps, certainly, but offers no guarantee. one of my responsibilities is to serve as the product director of the wholesale payments product office of the twelve federal reserve banks. this includes the fedwire transfer of