Disappearing Bank Accountsby
Robert Wenzel Recently by Robert Wenzel: Las Vegas Economy Among Worst in the World
If you don't have money outside the computerized banking system, you should do so now. You just never know when the system is going to go down. At such a time, the person, who does have cash, will be calling the tune. Remember, "He who has the gold makes the rules." Below, Simon Black reports on the major malfunction at one of Australia's largest banks ~ Robert Wenzel It all started a week ago. National Australia Bank, one of the largest in the country, had a technical malfunction in its core system. Within hours, a simple problem had practically brought a large part of Australia's banking system to its knees. It was a crazy turn of events. You see, banks don't use regular operating systems or database applications; they run specialty software that is intended to synchronize complex operations like cash deposits, overnight interbank drafts, central bank facilities, electronic transfers, credit card monitoring, and a host of sensitive data. When something goes wrong, it can throw the entire system into disarray, and customers end up getting hurt. In NAB's case, a corrupt file overloaded the bank's payment system, and this single failure eventually cascaded to other parts of their operations. Much to their surprise and fury, many customers found that their account balances had been blotted out, automatic payments (mortgages, car payments, insurance premiums) had not been drafted, and payment cards no longer functioned. Because of NAB's relative size in the country, the bank's infrastructure handles transactions for many of Australia's smaller banks, so those banks' customers were affected too. December 2, 2010 ©2010 Economic Policy Journal
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