About the Center- Recent Activities
ABOUT THE CENTER
The Center's goal is to promote and facilitate an exploration of how financial regulation must be modernized to support financial stability, consumer protection, and secure financial networks.
The Center is an independent Virginia nonprofit corporation. The Center will apply to the Internal Revenue Service for tax-exempt status as a private operating foundation under Section 501(c)(3) of the Internal Revenue Code.
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The Financial Technology & Cybersecurity Center
&
The Growing Cybersecurity Threat
Executive Director Thomas P. Vartanian discusses the role of the Center and how it plans to promote sound public policy with regard to the growing number of financial infrastructure cybersecurity threats in this 30-minute podcast interview.
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Statement on Deposit Insurance
Statement of
Financial Technology & Cybersecurity Center
March 16, 2023
A New Idea for Deposit Insurance
The events of the last week demonstrate that federal deposit insurance may no longer be structured to maximize customer confidence and systemic stability. While it was originally created to protect small individual savers, small and large businesses routinely and necessarily maintain daily operating accounts in banks that exceed the current $250,000 deposit insurance limitation. As a result, those depositors are at risk and likely to move their accounts to banks that they consider safer at the first sign of trouble. Recent reports indicate numerous large regional banks hold more than 50% of their deposits in an uninsured status. This threat to financial stability will continue as long as there is a widespread belief that uninsured depositors at the very largest institutions are safe, while uninsured depositors at all other banks, including large regional banks, are at risk.
To mitigate this threat, Congress could amend the Federal Deposit Insurance Act to provide that all deposits at U.S. offices of FDIC-insured institutions may be insured above the current $250,000 limit if the depositor opts into a new supplemental insurance program. In that case, a fee based on, among other things, the average prior month size of the deposit, would automatically be deducted from the account on the first business day of a month. The fee would be paid directly to the FDIC and would be placed in the Deposit Insurance Fund. In contrast, in the event of a bank failure, uninsured deposits would be required to be retained in the receivership, where the uninsured depositors would only be paid out as receivership assets became available. With such a system in place, each bank customer with a deposit in excess of $250,000 would be provided the clear choice to either pay a monthly charge to insure any amount above that level, or assume the risk of being uninsured.
Deposit insurance has historically been a critical factor in maintaining confidence in the U.S. banking system. Today’s circumstances call for an innovative new approach that gives customers the opportunity to decide how much they value the availability of that coverage by voting with their wallets.
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Coming March 29, 2023
You are invited to attend
live or virtually
The American Enterprise Institute
Presents
Rebuilding Cyberspace to Prevent Financial Collapse: A Book Event
March 29, 2023 5:00 - 7:00 pm
AEI, Auditorium
1789 Massachusetts Avenue NW
Washington, DC 20036
A presentation of and discussion about:
The Unhackable Internet: How Rebuilding Cyberspace Can Create Real Security and Prevent Financial Collapse
Author: Thoma P. Vartanian
Complimentary book signing and reception to follow for attendees
Register Here:
Rebuilding Cyberspace to Prevent Financial Collapse: A Book Event
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New Center Program Coming May 4, 2023
A Must See Event
Live and Virtual
"Escalating Cyber Threats to the U.S Financial System:
Time to Think Outside the Box"
Sponsored by
Financial Technology & Cybersecurity Center
and
George Mason University School of Business, Center for Assurance Research and Engineering
and
George Mason University
Volgenau School of Engineering
Stay Tuned for Registration Information
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RECENT FINANCIAL TECHNOLOGY & CYBERSECURITY CENTER ACTIVITIES
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Here's The Latest:
Wall Street Journal Opinion Article
by
Thomas P. Vartanian:
February 10, 2023
Biden Plays the Junk Card
https://www.wsj.com/articles/biden-plays-the-junk-card-banks-credit-card-financial-regulation-fees-loans-interest-rates-borrowing-congress-consumer-financial-protection-bureau-e704f16?mod=opinion_lead_pos6
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Homeland Security Today Interview
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America Trends Podcast
If You Lock Your Front Door, Your Home Is Better Protected Than Your Digital Life
https://www.americatrendspodcast.com/2023/02/09/ep-628-if-you-lock-your-front-door-your-home-is-better-protected-than-your-digital-life/
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The Curious Mans Podcast
A Conversation with Thomas P. Vartanian:
The Unhackable Internet: How Rebuilding Cyberspace Can Create Real Security and Prevent Financial Collapse
https://podcasts.apple.com/us/podcast/tom-vartanian-interview/id1369458829?i=1000600182338
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The Shelley Irwin WGVU Morning Show
Grand Rapids MI (NPR)
A Conversation with Thomas P. Vartanian:
The Unhackable Internet: How Rebuilding Cyberspace Can Create Real Security and Prevent Financial Collapse
https://www.wgvunews.org/people/shelley-irwin
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The Chris Voss Show:
A Conversation with Thomas P. Vartanian
The Unhackable Internet: How Rebuilding Cyberspace Can Create Real Security and Prevent Financial Collapse
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Keen On:
How We Built the Wrong Internet: An Interview with Thomas P. Vartanian on Rebuilding Cyberspace to Make it "Unhackable"
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BBC Radio Interview:
"Crypto, the Collapse of FTX, and Where Regulation Goes From Here"
Listen as Executive Director Thomas P. Vartanian participates in a terrific BBC World Business Report debate/interview about crypto and the collapse of FTX
https://www.bbc.co.uk/programmes/p0ds9phy
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RECENT CENTER PROGRAMS:
Live & Online Programs
December 7, 2022
* Executive Roundtable Discussion *
“Demystifying Artificial Intelligence: Its Impact on Finance and Regulation”
View the entire program here:
https://fast.wistia.net/embed/channel/ur4k40a0hm?wchannelid=ur4k40a0hm&wvideoid=zmc47kj4me
President Biden’s recent Executive Memo on Artificial Intelligence, Blueprint for an AI Bill of Rights: Making Automated Systems Work for the American People, focuses on the growing influence of AI technologies. While AI can dramatically improve the delivery and regulation of financial services, novel algorithms and the ways that they are used add new complexities to compliance and the potential for inadvertent discrimination. That suggests the early adoption of standards and rules of engagement to ensure that Americans are protected from as much as they are assisted by AI.
Moderated by:
Thomas P. Vartanian
Executive Director, Financial Technology & Cybersecurity Center
Brian Knight
Director of Innovation and Governance and a Senior Research Fellow, The Mercatus Center at George Mason University
Experts included:
Brad Blower, General Counsel, National Community Reinvestment Coalition
Neil Chilson, Senior Research Fellow, Technology and Innovation at Stand Together
Carol Evans, Deputy Fair Lending Director, Consumer Financial Protection Bureau
Dr. Mark Flood, Program Manager, Information Innovation Office, Defense Advanced Research Projects Agency
Phillip Hurst, Assistant General Counsel, Card Data Sciences & Machine Learning, Capital One
Melissa Koide, CEO & Director, The FinReg Lab
Kevin Greenfield, Deputy Comptroller for Operational Risk Policy, Office of the Comptroller of the Currency
Tommy Jones, Senior Technology Architect, Enterprise Technologies, In-Q-Tel
Melissa Koide, CEO, FinRegLab
Brenda Leong, Partner, BNH AI
William Magnunson, Professor of Law, Texas A&M University School of Law
Matt Mittelsteadt, Visiting Research Fellow, Mercatus Center
Weifeng Zong, Senior Research Fellow, Mercatus Center
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April 27, 2022
"THE IMPACT OF STABLECOINS ON FINANCIAL REGULATION, CONSUMERS AND POLITICS"
An Executive Roundtable discussion moderated by Financial Technology & Cybersecurity Center (FTCC) Executive Director Thomas P. Vartanian and Conference on Consumer Finance Law (CCFL) Chairman James M. Milano with distinguished guests:
- Brian P. Brooks, CEO, Bitfury, former Acting Comptroller of the Currency
- Jelena McWilliams, former FDIC Chair
- Randal K. Quarles, Chairman, The Cynosure Group, former Vice Chairman for Supervision, Federal Reserve Board
Join the nearly 700 registrants of this program and watch it here:
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RECENT CENTER STATEMENTS
March 3, 2023
The Center's Executive Director issued a Statement on the White House National Cybersecurity Strategy (March 2023)
STATEMENT OF
Thomas P Vartanian, Executive Director
Regarding:
The Biden Administration’s National Cybersecurity Strategy
https://www.whitehouse.gov/wp-content/uploads/2023/03/National-Cybersecurity-Strategy-2023.pdf
March 3, 2023
As Executive Director of the Financial Technology & Cybersecurity Center, I believe that enlightened federal government leadership is essential to guiding our nation to a stronger position in confronting cybersecurity threats. In that context, I have analyzed every White House pronouncement on cybersecurity in the last 25 years. That analysis is included in my new book, The Unhackable Internet.
From that perspective, the Biden Administration's National Cybersecurity Strategy does indeed advance national cybersecurity policy. It recognizes that the Internet is ill constructed for the roles it is expected to play - an important first step in fixing it. In addition, its proposal to alter economic incentives and impose greater liabilities to drive companies to maximize their cybersecurity efforts and secure data would make a difference. The release also correctly concludes that the U.S. must stand up and lead the democratic nations of the world to forge new cybersecurity solutions.
But it falls short in suggesting that we can correct the structural deficiencies of the Internet if we simply run faster to get ahead of them. It avoids any discussion of real solutions such as building new secure private networks for critical infrastructures where, for example, authentication is enhanced and anonymity is prohibited. It also seems to presume that the current cybersecurity challenge, which is not within the control of any one government, is correctable through more government involvement. Finally, it fails to provide a compelling reason why its repetition of the same government admonitions will this time alter the record of acute ineffectiveness by policymakers over the last twenty-five years.
Sadly, the insecurity of the Internet won’t be solved until businesses and users conclude that the costs of vulnerability and the loss of privacy have reached the point of no return. Then the private sector will act, and governments will follow. By then, everyone will wish that we had built a different and safer kind of online existence.
To stay informed and receive periodic alerts from the Center, visit https://fintsc.org/stay-informed/
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March 9, 2022
STATEMENT OF
Thomas P Vartanian, Executive Director
Comments on Today's
White House Executive Order on Crypto
Cryptocurrencies are the modern-day equivalency of the money market funds of the 1980s, which both revolutionized and destabilized financial markets. We would have hoped the government learned its lesson in how to regulate such new financial products.
Although much anticipated, the Executive Order does not pack any substantive punch and adds very little. It adheres to the long-standing approach over the last twenty-five years of directing some two dozen different agencies to coordinate action and require the creation of dozens of reports.
While no fault of the Biden Administration, the admonitions in the Order are fourteen years too late in trying to bring rationality, security, and stability to an unregulated industry that is actually more than $10 trillion in size when derivative cryptocurrency instruments and leverage are included.
The Order continues to miss the fundamental point that crypto-assets – including Central Bank Digital Currencies (CBDC) - require security which will never be achieved unless we build a new Internet that favors enhanced authentication, identification, governance, and enforcement of standardized rules..
To the extent that administrations and Congress continue to be incapable of confronting the fundamental issues posed by crypto-assets and balancing them with the need for technological innovation, it leaves to the financial regulators the job of reasserting American leadership as the Order seeks to achieve.
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OTHER CENTER ACTIVITIES
Listen to these interviews in July 2022
with Executive Director Thomas P. Vartanian about the U.S. economy:
The WealthFormula:
A Conversation with Executive Director Thomas P. Vartanian about
200 Years of American Financial Panics: Crashes, Recessions, Depressions And The Technology That Will Change It All
https://www.wealthformula.com/podcast/326-200-years-of-financial-panics/
and
The Next Financial Bust:
A Conversation with Executive Director Thomas P. Vartanian
https://thecashflowacademy.libsyn.com/the-next-financial-bust
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RECENT PUBLICATIONS
Executive Director Thomas P. Vartanian Op-Eds:
February 23, 2022, Democracy Paradox
The Price of Financial Stability in a Digital Economy
The Price of Financial Stability
https://democracyparadox.com/2023/02/23/the-price-of-financial-stability-in-a-digital-economy/
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February 10, 2023, Wall Street Journal
Biden Plays the Junk Card
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February 1, 2023, Cyber Defense Magazine
Time to Build an Unhackable Internet
https://cyberdefensemagazine.tradepub.com/free/w_cyba147/
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January 9, 2023, The Hill
Death of the Crypto Formula
https://thehill.com/opinion/finance/3804444-death-of-the-crypto-formula/
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December 12, 2022, Financial Times
FTX’s predictable failings show the need for crypto regulation
https://www.ft.com/content/0ea1eb28-7f70-4b50-a50b-bac3ea8151a4
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October 7, 2022, The Hill
Rough economic waters ahead: Will we choose wisely?
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September 24, 2022, Kiplinger
Cryptocurrency: Stay In? Get Out? How to Decide?
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September 13, 2022, The Hill
Biden’s college loan forgiveness misses the point
https://thehill.com/opinion/education/3640714-bidens-college-loan-forgiveness-misses-the-point/
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September 2, 2022, The Hill
With former FDIC Chairman William M. Isaac
Biden’s student loan bailout and the death of skin in the game
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August 19, 2022, The Hill
What’s our plan to stop China’s acquisition of America?
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July 21, 2022, The Hill
Blinded by the light: 7 red flags about cryptocurrencies we completely missed
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July 1, 2022, The Hill
With former SIPC President & CEO Stephen P. Harbeck
This crypto winter is warm compared to the next one
https://thehill.com/opinion/finance/3544051-this-crypto-winter-is-warm-compared-to-the-next-one/
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June 30, 2022, The Business Observer
With former FDIC Chairman William M. Isaac
Time to get smart about financial technology – and how to regulate the $10T industry
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June 16, 2022, The Hill
With former Chairman of the FDIC William M. Isaac
Ten economic warning signs policymakers ignored
https://thehill.com/opinion/finance/3525430-ten-economic-warning-signs-policymakers-missed/
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May 13, 2022, The Hill
Is crypto too cool to question?
https://thehill.com/opinion/finance/3486951-is-crypto-too-cool-to-question/
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April 6, 2022, American Banker
"What the president’s crypto order should have said"
https://www.americanbanker.com/opinion/what-the-presidents-crypto-order-should-have-said
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March 21, 2022, The Hill
With former FDIC Chairman William M. Isaac
From economic sleight of hand to stark reality
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March 10, 2022, The Hill
Strong banks are essential to national security
https://thehill.com/opinion/national-security/597717-strong-banks-are-essential-to-national-security?rnd=1646936669
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RECENT APPEARANCES
(A complete list is at www.thomasvartanian.com)
March 3, 2023
Homeland Security Today
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December 30, 2022
Thomas P. Vartanian was interviewed regarding Crypto and the FTX Collapse on
BBC World Business Report Radio
https://podcasts.apple.com/lt/podcast/the-future-of-crypto/id292651411?i=1000591733229 and
https://www.bbc.co.uk/programmes/p0ds9phy
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November 16, 2022
Fox Business News Tonight
FTX and The Need to Regulate Crypto
https://video.foxbusiness.com/v/6315637311112#sp=show-clips
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August 4, 2022
Executive Director Thomas P. Vartanian spoke on
"The Dark Side of Fintech - Dark Data & Cybersecurity"
Federal Reserve Bank of Philadelphia
Sixth Annual Fintech Conference -
https://web.cvent.com/event/6ffcfe28-ed18-4f26-9abb-e339a48e7825/summary
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July 5, 2022
Thomas P. Vartanian appeared on the Cash Flow Academy podcast - "The Next Financial Bust"
https://thecashflowacademy.libsyn.com/the-next-financial-bust
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May 19, 2022
Thomas P. Vartanian signed his book
200 Years of American Financial Panics: Crashes, Recessions, Depressions And The Technology That Will Change It All
at the Sarasota1Bookstore
2022 Local Author Book Fair | Bookstore1Sarasota (sarasotabooks.com)
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May 17, 2022, American Enterprise Institute
Executive Director Thomas P, Vartanian spoke
A Conversation with Sen. Cynthia Lummis (R-WY): Regulation and the Future of Crypto Assets
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May 17, 2022, The Federalist Society
Executive Director Thomas P. Vartanian spoke
The Government's Arm Around Cryptocurrency: Hug or Stranglehold
https://fedsoc.org/events/the-government-s-arms-around-cryptocurrency-hug-or-stranglehold
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April 1, 2022
EXECUTIVE DIRECTOR THOMAS P. VARTANIAN
DELIVERED THE
ANNUAL BLEISCHER ADDRESS
AT
The University of North Carolina School of Law's Center for Banking and Finance
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