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BRUSSELS The European Union is considering testing banks' defenses against cyber attacks, EU officials and sources said, as concerns grow about the industry's vulnerability to hacking.

Cyber attacks against banks have increased in numbers and sophistication in recent years, with criminals finding new ways to target banks beyond trying to illicitly obtain details of their customers' online accounts. Last February $81 million was taken from the Bangladesh central bank when hackers broke into its system and gained access to the SWIFT international transactions network.

Global regulators have tightened security requirements for banks after that giant cyber fraud, one of the biggest in history, and in some countries have carried out checks on lenders' security systems.

But complex cyber attacks have kept rising, as revealed in November by SWIFT in a letter to client banks and by the theft of 2.5 million pounds ($3 million) from Tesco Plc's banking arm in the first mass hacking of accounts at a Western lender.

Banks "are struggling to demonstrate their ability to cope with the rising threat of intruders gaining unauthorized access to their critical systems and data," a report of the European Banking Authority (EBA) warned in December.

The next step from European regulators to boost security could be an EU-wide stress test.

The European executive commission is assessing additional initiatives to counter cyber attacks, a commission official told Reuters. "These include cyber-threat information sharing or penetration and resilience testing of systems."

The European Central Bank announced last year it would set up a database to register incidents of cyber crime at commercial banks in the 19-country euro zone. But exchanges of information among national authorities on cyber incidents remains scant.

The Commission is studying whether EU-wide tests would help step up security, a source at the EU executive said. This would be in addition to controls already carried out by national authorities.

EBA, which is in charge of stress-testing the bloc's banks, is expected to detail in summer the checks it intends to conduct in the next exercise planned in mid 2018.

EBA tests banks' capital cushions and can conduct checks on specific issues. Last year it monitored risks caused by fines, as EU lenders faced sanctions from U.S. regulators.

An EBA official said cyber security was on the agency's radar but no decision had been made on a possible stress test. The body's chairman, Andrea Enria, has urged EU states to stress-test their financial institutions for cyber risks.

Lloyds Banking Group is working with law enforcement agencies to trace who was behind a cyber attack that caused intermittent outages for customers of its personal banking websites almost two weeks ago, according to a source familiar with the incident. Lloyds said it would not speculate on the cause of the attack. No customers suffered any losses.

BLOCKCHAIN

As European banks keep relying on digital infrastructure that is "rigid and outdated", according to EBA, regulators are considering new technologies that could boost security.

Blockchain, the technology behind the most successful virtual currency, Bitcoin, is being closely monitored in Brussels "to establish the advantages and possible risks" but also to weigh possible moves to enable blockchain where it is hindered, the Commission source said.

More than 1 billion euros have been invested in blockchain startups, a World Economic Forum report said.

The EU agency for network and information security (ENISA) said in a report last week the technology offered new opportunities and could cut costs, but may also pose new cyber security challenges, mostly caused by its decentralized network.

U.S. telecom sector could be on the brink of a major consolidation under President Donald Trump's likely more merger-friendly administration, said JP Morgan Securities, which now sees a 90 percent chance of T-Mobile US being involved in a strategic transaction in the next five years.

LONDON Lloyds Banking Group is working with law enforcement agencies to trace who may be behind a cyber attack that caused intermittent outages for customers of its personal banking websites almost two weeks ago, according to a source familiar with the incident.

TOKYO Main Japanese lenders of Toshiba Corp have agreed to not call in some of their loans early for now even as recent downgrades of the troubled firm's credit ratings violate some provisions in debt agreements, two people with direct knowledge of the matter said.

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As attacks grow, EU mulls banking stress tests for cyber risks - Reuters

By Sebastian Mallaby

Special To The Washington Post

Germany's foreign minister reports "astonishment and agitation." The French president protests indignantly about unsolicited "outside advice." Even Secretary of State John Kerry sees behavior that is "inappropriate." Then President-elect Donald Trump's weekend interview, in which he casually predicted the breakup of the European Union, has certainly attracted attention.

But despite the consternation, there is some truth in Trump's message. The EU, he observed, is dominated by Germany. "People, countries want their own identity," he said.

The most obvious vindication of Trump's warning comes from Britain, whose prime minister, Theresa May, has just laid out her plans for a hard break with the European Union. May could have interpreted June's Brexit referendum differently, seeking the "Norway model" of continued membership in the EU's Single Market even while withdrawing from the EU's political structures. But, to paraphrase Trump, the prime minister evidently believes that Britain must have its own identity.

She is determined to curb EU migration, even though migrants contribute positively to the economy; she wants out of the European Court of Justice, even though that court has upheld British commercial interests in the past. Combined, these two positions rule out continued Single Market membership. The EU is losing its second-biggest economic power.

Britain has always been a semi-attached member of the European Union, so the malaise at the heart of continental Europe is even stronger evidence that Trump is on to something. Ironically, all the pressures that are commonly wheeled out to explain Trump's election are far more evident on the other side of the Atlantic: sluggish growth, poor prospects for workers, a backlash against migrants, disaffection with elite governance.

Americans may feel that their recovery since the financial crisis has been anemic. But, adjusted for inflation, the U.S. economy has actually grown by a cumulative 12 percent since 2008. In contrast, the 28 countries in the European Union managed combined growth of just 4 percent. And in the subset consisting of the eurozone minus Germany, output actually fell. Even though the strong dollar may help Europe this year, most of the Mediterranean periphery has suffered a lost decade.

Naturally, this horrible performance has taken an enormous human toll. The unemployment rate in the euro area stands at 9.8 percent, more than double the U.S. rate. Unemployment among Europe's youth is even more appalling: In Greece, Spain, France, Croatia, Italy, Cyprus and Portugal, more than 1 in 4 workers under 25 are jobless. America's ability to put its economic house in order after 2008 shows that there was nothing foreordained about this. Europe has suffered an optional catastrophe. It has a lost generation to match its lost decade.

The decisions that delivered this destruction were made overwhelmingly in Germany, just as Trump seems to suspect.

Angela Merkel, the country's sober, deliberate and altogether un-Trumpian chancellor, systematically slow-walked measures that could have accelerated Europe's recovery. Budget stimulus, bank recapitalizations and, at least early on, monetary policy were sluggish because of German resistance. At some points in this process, Merkel was protecting German taxpayers, which is both reasonable and yet at the same time supportive of Trump's view that national interests beat euro cohesion.

At other points Merkel has been protecting nothing more vital than Germans' phobia of even modest public borrowing and inflation -- and never mind the plight of Mediterranean youth.

Merkel's cautious leadership of Europe has sown the seeds of a populist backlash. This has been a surprisingly long time coming: For several years after the onset in 2010 of the euro crisis, austerity and mass unemployment did remarkably little to turn voters against establishment leaders. But a recent Italian poll suggests that, if an election were held today, the anti-globalization and anti-euro Five Star Movement would take as many votes as the leading establishment party.

In France, polls have the anti-EU Marine Le Pen as the joint front-runner in this spring's presidential election.In Merkel's Germany, support for the anti-migrant AfD party has jumped from about 5 percent in 2013 to 16 percent now.

If you take Trump literally, his recent comments on Europe were exaggerated and confused. Populists may be on the rise, but we are a long way from a crackup of the European Union; and to denigrate Merkel for opening her country to "illegals," when what she did was welcome refugees, many of whom were fleeing a war fueled by U.S. vacillation, is infuriating and obtuse.

But if you take Trump seriously rather than literally -- to borrow the wonderful distinction made by Salena Zito in the Atlantic -- then it has to be admitted that the new president has a point here. Europe is in deep trouble. It is time for its leaders to recognize that incremental policies are failing the continent's people.

Sebastian Mallaby is a Post contributor and Paul A. Volcker senior fellow for international economics at the Council on Foreign Relations. He is author of "The Man Who Knew: The Life and Times of Alan Greenspan."

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A MELTING POINT: Trump says European Union is in trouble - Lowell Sun

A selection of German front pages feature images and stories on Theresa Mays Brexit speech. Photograph: Steffi Loos/Getty Images

Among the German public, last weeks speech by Theresa May has gone down largely unnoticed. Rather, headlines were dominated by the incoming presidency of Donald Trump and his interview with widely-read German tabloid Bild. After seven months, Germans have got over the referendum and the prospect of Britain being on its way out of the European Union.

Indeed, the wider German public has shown little interest in questions regarding the future of Europes relationship with the UK, let alone in the details and minutiae of the UKs legal withdrawal and future relationship with the EU. If anything, the Brexit vote has bolstered support for the EU. As one study conducted at the end of 2016 shows, Germans views on the EU have evolved positively over the course of the past year, in large part due to the results of the UK referendum.

While in March 2016, 61% of Germans polled suggested they would vote against exiting the European Union in a potential referendum, this number grew to almost 70% in August, suggesting that citizens feel a greater need for European solidarity and security in the face of a potential break-up. Trumps inauguration is likely to cement this sentiment; consider that one aspect of Trumps interview in Bild that aroused particular controversy was his suggestion that further exits from the European Union were not only likely but inevitable.

In Berlins political class, a similar sense of acceptance has developed. The result of the June 2016 referendum did not really come as a surprise to Berlin; what did create a strong sense of bafflement, however, was that Westminster had not adequately planned for this outcome. After the referendum, several government ministers expressed their dismay at what was seen as utterly careless behaviour by British politicians.

Europe is not something to play around with, the foreign minister, Frank-Walter Steinmeier, commented in front of Berlins ambassadorial corps last summer, a hardly veiled criticism of the Brexiters. In fact, the political chaos unleashed by the referendum only strengthened the view that forced to choose between retaining bountiful economic relations with Britain or keeping the EU in good shape, Berlin should choose the latter.

The priority of keeping the union of 27 together has been the consistent, dominant message in Berlin over the past months and Angela Merkel has invested a great deal of energy in shaping a unified European position on the Brexit process. As such, there is no desire for retaliation, but a rather sober and solemn assessment that the British withdrawal is merely another challenge to be added to Berlins overladen foreign policy agenda. More positively, the threat to European cohesion has brought Berlin and Paris closer together again and, at this stage, Berlin is much more worried about Frances future in the EU. A President Le Pen is a grave, existential threat to the EU, in a way Brexit never really could be.

The German government has resisted wooing by London lately, insistent that there would be no negotiations without Britain officially triggering article 50. Berlin has stood remarkably firm on this particular point over the past months, arguing that there could be no compromise on the four freedoms. Considering this backdrop, Theresa Mays speech last week was in fact welcomed in Berlin. The prime ministers announcement that Britain would pursue a complete, clean break from all EU structures (including the single market) and aim to negotiate a free-trade agreement with the EU has brought greater clarity to European negotiators and reduced the risk of British cherry-picking.

Having said that, German officials know from experience that what seems black and white from their point of view might in fact be different shades of grey on the other side of the Channel. In other words, Berlin also anticipates that in the upcoming negotiations, Mays currently clear-cut goals could very well give way to a more erratic approach; negotiating special rules for specific sectors, such as the financial industry, might still be on the table further down the road.

Berlin is prepared for the EU to enter a period of complex and demanding negotiations once article 50 has been triggered; considering last weeks speech, it has become abundantly clear that Britain will have to punch extremely hard in order to realise Mays vision of a global Britain.

Philip Hammonds recent interview in German newspaper Die Welt, in which he implied that the UK could effectively become a tax haven as a means of relief from the consequences of Brexit, was universally rebuked in Germany, illustrating the state of current discourse. At the same time, there is also a broad consensus that both the UK and German would suffer greatly in the tax dumping scenario outlined by Hammond.

Berlin never wanted Britain to leave the EU and in many ways this choice is now coming at the worst of times. Europe is confronted with major, concrete questions of prosperity and security, while at the same time there is a strong sense of realism in Berlin that only a few years ago would have perhaps resonated positively in London.

But nowadays, as the prime minister expressed in her speech, Britain thinks in terms of broad visions, while the German government sternly insists that this is no time for vision, or for waxing lyrical about an ever closer union, but rather a time for grit-and-grind dispassion and getting things done. The twisted irony, then, is that the UK is abandoning Europe at a time when Germany has perhaps come to cherish the beauty of shades of grey.

Yet the fact that Germany has repeatedly underlined Britains weak negotiating position should not be diagnosed as a symptom of overconfidence. The German government knows very well that keeping the European Union together will be a major struggle; a struggle that will become far more difficult once President Trump steps into the Oval Office on Monday morning.

Almut Mller is a senior policy fellow and director of the Berlin office of the European Council on Foreign Relations (ECFR)

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Europe's priority now is to keep the union of 27 together - The Guardian

In a highly-charged intervention Dutch PM Mark Rutte said the troubled bloc cannot go on as it is and accused eurocrats who still hope to morph the continent into one United States of Europe of accelerating its dismantling.

Instead he called for a new pragmatic settlement between member states and Brussels with more respect for national sovereignty, whilst also suggesting that some of the EUs most ideologically precious principles need rapidly overhauling.

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But his proposals were met with a robust response from former European Parliament president Martin Schulz, who mounted a passionate defence of the biggest cultural achievement the continent has seen in centuries and said more Europe is needed to solve its problems.

The pair clashed in a frantic debate at the World Economic Forum in Davos earlier today, where they were part of a panel discussion how the European Union can survive the challenges posed by Brexit, Donald Trump, the migrant crisis and eurozone stagnation.

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Mr Rutte, who is facing an election battle with populist leader Geert Wilders in March, insisted that committing to and even accelerating the idea of ever-closer union is the fastest way to dismantling the entire Brussels project.

He said that the world has changed since the days when German chancellor Helmut Kohl and French president Francois Mitterrand cooked up the process of pooling sovereignty to avoid a repeat of the Second World War.

And the Dutch leader hinted that Brussels will need to compromise on its cherished freedom of movement rules in light of the Brexit vote if it wants to stem a growing populist movement sweeping the continent.

He said: There has been a huge shift in thinking because this whole idea of an ever closer union is now really buried. Its gone.

What you now have is a Europe which has to be relevant and not the sort of project which has a momentum of its own.

This whole idea of an ever closer union is now really buried. Its gone.

Dutch PM Mark Rutte

Mr Rutte said it was absolutely fantastic that the EU Commission has significantly slashed the amount of needless legislation it pumps out in recent years, adding that the Brussels bloc will fail if leaders do not make it relevant to ordinary voters.

He said: We need to show to the people that Europe is adding and it is possible to control immigration, to create more jobs, to control our outer borders.

If we continue about talking that we are step by step moving towards some sort of European superstate, that is the fastest way to dismantling the European Union.

The fact that Mr Rutte deliberately separated the issues of migration and external border control suggests that he is planning to argue that internal movement of people within the EU also needs to be brought under control.

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But he was firmly rebuked by Mr Schulz, who is returning to national politics in Germany after five years as EU Parliament president, who accused national governments of betraying the EU by trying to blame their own shortcomings on Brussels.

He raged: Mark said this idea of ever closer union, thats done now. Thats wrong. What is the message of Europe an ever less closer union of countries and citizens?

More than ever we need in the 21st century an ever closer union of citizens in the European Union.

What I expect from leaders in Europe, is that they dont say this is now over, an ever closer union - no, in the 21st century I expect from the leaders that they say more than ever we have to stick together.

If the leaders will not think that way then we are really at risk. If the heads of states of government - Angela Merkel, Mark Rutte, Francois Hollande - will not publicly say this this is our union based on that idea then the European Union has no chance for the future.

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'NO MORE SUPERSTATE' Dutch PM says ever-closer union 'dead' and urges free movement reform - Express.co.uk

Mr Prodi, who had two spells in power, condemned the lack of leadership and strategy in Brussels and admitted the Europe he once dreamed of was dead.

His comments came in an interview with Italys Quotidiano newspaper in the same week Theresa May laid out her plans for a hard Brexit which would sever all existing ties with the EU including the single market and customs union.

The 77-year-old said: The EU has no strategies and there is no leader to follow.

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The Europe I dreamed of is dead. Now we can only do one thing: pray

Romano Prodi

"The Europe I dreamed of is dead. But I hope the crisis will wake us up. Now we can only do one thing: pray.

Mr Prodi said did not have great hopes about the future of the European Union which he said was increasingly divided by national and political interests.

And he said Brexit had accelerated the process of detachment from Brussels.

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He told Quotidiano: I was disappointed by Brexit but not surprised. The new thing is the American encouragement to Brexit.

It is an unprecedented and inappropriate interference in my opinion. From a political point of view the fact that the future US President supports Brexit says a lot.

On the future of the EU, Mr Prodi called for "a single strategy".

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Countries that are in the European Union

He said: The real problem is that, once again, there will not be a common policy.

We would need a real leader who would put himself in other peoples shoes.

"Whoever leads a political coalition and a group of countries must consider the interests of all the members. I am talking about Angela Merkel."

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'We can only pray!' Former Italy PM admits European Union 'he once dreamed of' is DEAD - Express.co.uk