The Threat of Silence

Meet the groundbreaking new encryption app set to revolutionize privacy and freak out the feds.

By Ryan Gallagher | Posted Monday, Feb. 4, 2013, at 12:21 PM ET

For the past few months, some of the world’s leading cryptographers have been keeping a closely guarded secret about a pioneering new invention. Today, they’ve decided it’s time to tell all.

Back in October, the startup tech firm Silent Circle ruffled governments’ feathers with a “surveillance-proof” smartphone app to allow people to make secure phone calls and send texts easily. Now, the company is pushing things even further—with a groundbreaking encrypted data transfer app that will enable people to send files securely from a smartphone or tablet at the touch of a button. (For now, it’s just being released for iPhones and iPads, though Android versions should come soon.) That means photographs, videos, spreadsheets, you name it—sent scrambled from one person to another in a matter of seconds.

“This has never been done before,” boasts Mike Janke, Silent Circle’s CEO. “It’s going to revolutionize the ease of privacy and security.”

True, he’s businessman with a product to sell—but I think he is right.

The technology uses a sophisticated peer-to-peer encryption technique that allows users to send encrypted files of up to 60 megabytes through a “Silent Text” app. The sender of the file can set it on a timer so that it will automatically “burn”—deleting it from both devices after a set period of, say, seven minutes. Until now, sending encrypted documents has been frustratingly difficult for anyone who isn’t a sophisticated technology user, requiring knowledge of how to use and install various kinds of specialist software. What Silent Circle has done is to remove these hurdles, essentially democratizing encryption. It’s a game-changer that will almost certainly make life easier and safer for journalists, dissidents, diplomats, and companies trying to evade state surveillance or corporate espionage. Governments pushing for more snooping powers, however, will not be pleased.

By design, Silent Circle’s server infrastructure stores minimal information about its users. The company, which is headquartered in Washington, D.C., doesn’t retain metadata (such as times and dates calls are made using Silent Circle), and IP server logs showing who is visiting the Silent Circle website are currently held for only seven days. The same privacy-by-design approach will be adopted to protect the security of users’ encrypted files. When a user sends a picture or document, it will be encrypted, digitally “shredded” into thousands of pieces, and temporarily stored in a “Secure Cloud Broker” until it is transmitted to the recipient. Silent Circle, which charges $20 a month for its service, has no way of accessing the encrypted files because the “key” to open them is held on the users’ devices and then deleted after it has been used to open the files. Janke has also committed to making the source code of the new technology available publicly “as fast as we can,” which means its security can be independently audited by researchers.

The cryptographers behind this innovation may be the only ones who could have pulled it off. The team includes Phil Zimmermann, the creator of PGP encryption, which is still considered the standard for email security; Jon Callas, the man behind Apple’s whole-disk encryption, which is used to secure hard drives in Macs across the world; and Vincent Moscaritolo, a top cryptographic engineer who previously worked on PGP and for Apple. Together, their combined skills and expertise are setting new standards—with the results already being put to good use.

According to Janke, a handful of human rights reporters in Afghanistan, Jordan, and South Sudan have tried Silent Text’s data transfer capability out, using it to send photos, voice recordings, videos, and PDFs securely. It’s come in handy, he claims: A few weeks ago, it was used in South Sudan to transmit a video of brutality that took place at a vehicle checkpoint. Once the recording was made, it was sent encrypted to Europe using Silent Text, and within a few minutes, it was burned off of the sender’s device. Even if authorities had arrested and searched the person who transmitted it, they would never have found the footage on the phone. Meanwhile, the film, which included location data showing exactly where it was taken, was already in safe hands thousands of miles away—without having been intercepted along the way—where it can eventually be used to build a case documenting human rights abuses.

One of the few people to have tested the new Silent Circle invention is Adrian Hong, the managing director of Pegasus Strategies, a New York-based consulting firm that advises governments, corporations, and NGOs. Hong was himself ensnared by state surveillance in 2006 and thrown into a Chinese jail after getting caught helping North Korean refugees escape from the regime of the late Kim Jong Il. He believes that Silent Circle’s new product is “a huge technical advance.” In fact, he says he might not have been arrested back in 2006 “if the parties I was speaking with then had this [Silent Circle] platform when we were communicating.”

But while Silent Circle’s revolutionary technology will assist many people in difficult environments, maybe even saying lives, there’s also a dark side. Law enforcement agencies will almost certainly be seriously concerned about how it could be used to aid criminals. The FBI, for instance, wants all communications providers to build in backdoors so it can secretly spy on suspects. Silent Circle is pushing hard in the exact opposite direction—it has an explicit policy that it cannot and will not comply with law enforcement eavesdropping requests. Now, having come up with a way not only to easily communicate encrypted but to send files encrypted and without a trace, the company might be setting itself up for a serious confrontation with the feds. Some governments could even try to ban the technology.

Janke is bracing himself for some “heat” from the authorities, but he’s hopeful that they’ll eventually come round. The 45-year-old former Navy SEAL commando tells me he believes governments will eventually realize that “the advantages are far outweighing the small ‘one percent’ bad-intent user cases.” One of those advantages, he says, is that “when you try to introduce a backdoor into technology, you create a major weakness that can be exploited by foreign governments, hackers, and criminal elements.”

If governments don’t come round, though, Silent Circle’s solution is simple: The team will close up shop and move to a jurisdiction that won’t try to force them to comply with surveillance.

“We feel that every citizen has a right to communicate,” Janke says, “the right to send data without the fear of it being grabbed out of the air and used by criminals, stored by governments, and aggregated by companies that sell it.”

The new Silent Circle encrypted data transfer capability is due to launch later this week, hitting Apple’s App Store by Feb. 8. Expect controversy to follow.

This article arises from Future Tense, a collaboration among Arizona State University, the New America Foundation, and Slate. Future Tense explores the ways emerging technologies affect society, policy, and culture. To read more, visit the Future Tense blog and the Future Tense home page. You can also follow us on Twitter.

Anonymous posts over 4000 U.S. bank executive credentials

Summary: Anonymous appears to have published login and private information from over 4000 American bank executive credentials its Operation Last Resort, demanding US computer crime law reform.

By Violet Blue for Zero Day | February 4, 2013 -- 07:28 GMT (23:28 PST)

Following attacks on U.S. government websites last weekend, Anonymous seems to have made a new "Operation Last Resort" .gov website strike Sunday night.

Anonymous appears to have published login and private information from over 4,000 American bank executive accounts in the name of its new Operation Last Resort campaign, demanding U.S. computer crime law reform.

A spreadsheet has been published on a .gov website allegedly containing login information and credentials, IP addresses, and contact information of American bank executives.

If true, it could be that Anonymous has released banker information that could be connected to Federal Reserve computers, including contact information and cell phone numbers for U.S. bank Presidents, Vice Presidents, COO's Branch Managers, VP's and more.

The website used in this attack belongs to the Alabama Criminal Justice Information Center (ACJIC). The page extension URL is titled, "oops-we-did-it-again."

The spreadsheet document contains usernames, names of individuals and their titles at banks across the U.S., hashed passwords (not passwords in plain text). It was placed on a .gov website and on Pastebin, and publicized via various Anonymous accounts on Twitter and Facebook.

A Reddit member called the numbers and commented,

OK, I called a few of them. What must be so problematic for the Federal Reserve is not the information so much as this file was stolen from their computers at all.

The ramifications of that kind of loss of control is severe.

Banks listed on the document claim credentials from management at community banks, community credit unions, and more, across the United States.


A visit to the bank websites on the document shows that these are current employees at each of the banks.

Anonymous stated in its first Operation Last Resort defacement last friday (ussc.gov) it had infiltrated multiple federal websites over a period of time. The hacktivist entity dropped enough technical details to make it clear that its tracks were covered and that Anonymous still had access to .gov websites.

Significance of Monday, February 4?

While today in the United States it is the day of a major American sporting event (the Superbowl), this Sunday night's timing of Anon's document release coincides with another event more important to the new Anonymous campaign Operation Last Resort - a campaign anchored on the Swartz tragedy.

After the Anonymous OpLastResort hacks last weekend, last Monday a House panel issued a letter to Attorney General Eric Holder (.pdf link) with seven specific questions, and demanding answers regarding the Swartz prosecution.

Tomorrow, Monday February 4, is the deadline for Attorney General Eric Holder to answer specific questions regarding the Aaron Swartz prosecution.

Anonymous may be focusing on that deadline, as well.

Previously on the defaced ussc.gov website Anonymous cited the recent suicide of hacktivist Aaron Swartz as a "line that has been crossed."

The statement suggested retaliation for Swartz's tragic suicide, which many - including the family - believe was a result of overzealous prosecution by the Department of Justice and what the family deemed a "bullying" use of outdated computer crime laws.

With the letter to Holder, the House Oversight and Government Reform Committee requests a briefing with the Justice Department. CNET writes,

"Many questions have been raised about the appropriate level of punishment sought by prosecutors for Mr. Swartz's alleged offenses, and how the Computer Fraud and Abuse Act, cited in 11 of 13 counts against Mr. Swartz, should apply under similar circumstances," [Reps. Issa and Cummings] say in the letter, which requests a briefing no later than February 4.

The letter is another voice from the Federal side of the discussion, joining a chorus led by Democratic congresswoman Rep. Zoe Lofgren who has authored a bill called "Aaron's Law" that aims to change the 1984 Computer Fraud and Abuse Act (with which Swartz was being prosecuted).

Last friday February 1, Lofgren submitted a draft of the bill to be reviewed on Reddit. Ars Technica reported that after its online critique, a revised version of the bill was published today, with more far-reaching reforms.

• Read more: Feds stumbling after Anonymous launches 'Operation Last Resort'
  

Last weekend Anonymous commandeered the US Sentencing website to launch Operation Last Resort "warheads" (encrypted files suggested by Anonymous to be sensitive US government documents).

The defacement demanded reform on US computer crime laws, citing the January 11 tragic suicide of young hacker and digital rights activist Aaron Swartz.

• See also: Anonymous hacks US Sentencing Commission, distributes files
• Tragedy cited as cause behind the attacks: Hacker, Activist Aaron Swartz Commits Suicide

Anonymous spent last weekend playing cat-and-mouse with the Department of Justice after taking over the ussc.gov website (still decimated and now "under construction" over a week later).

After the US government regained control of the .gov website used in the hacks and defacements, Anonymous regained control of two .gov sites and turned the sites into a mocking video game of Asteroids.

Public interest in Sunday's Asteroids game created a crowdsourced DDoS, downing the websites for days.

It is possible that banks and user information on tonight's new "oops we did it again" document may be connected to accounts at The Fed (The Federal Reserve Bank).

The Fed has a collection of services called Fedline, which operates at highly critical junctures across the U.S. banking system.

For instance, one of the services offered by Fedline is money and funding transfers via the U.S. Federal Reserve.

It enables financial institutions to transfer funds between member participants. These participants are estimated to be around more than 9,000 financial entities (such as banks).

Fedline is the primary U.S. network for high value, time-critical and international payments.

In 2007 the estimated average daily value of funds transferred via Fedline products was 2.7 trillion (an estimated 537,000 payments daily, the average was over $5 million per transaction).

At this point, the information on the document is unverified and exactly what banking systems the information may affect is not known. ZDNet will update this article with new information as it becomes known.

The Operation Last Resort video, posted Friday on the U.S. Sentencing Commission website now has 1,183,000 views. 

It is interesting to note that this second "official" #OpLastResort salvo does not cite AntiSec, as seen in the Asteroids game.

Anonymous appears intent to influence federal action - one way or another.

Benjamin Fulford 2-5-13…” Queen Beatrix quits, the Rockefellers flee, the Bushes are rats in a trap; Queen Elizabeth, the Pope and the Rothschilds are still standing”

The announcement last week that Queen “Bilderberg” Beatrix of the Netherlands was abdicating the throne is but a visible sign of some fundamental changes in the secret power structure of the West. In a yet to be publicly confirmed move, David and J. Rockefeller have fled to an Island near Fiji, according to a CIA source. The Bush family, for its part, tried to flee via an airport in Arkansas but were prevented from doing so by the FBI, the same source says.

This source, who correctly predicted the resignation of Queen Beatrix is also saying that Queen Elizabeth will resign in favour of her grandson in the near future.

These moves are all connected to the ongoing counter-attack against the genocidal Western elitists affiliated with the Bilderberg group, the Council on Foreign Relations and other related organizations. As will be described below, there is a lot more to come.

Also, at the time of this writing Lord James Sassoon has not responded to a hand-written letter delivered to him last week at the House of Lords in England asking for comment on the allegations that he bribed 82 politicians (actually paid actors) affiliated with Japan’s ruling Liberal Democratic Party.

There are also plenty of indications of escalating infighting within the financial elite. The SWIFT international banking transfer system, for example, is becoming dysfunctional because large money transfers are being intercepted and diverted to unknown destinations before the intended recipients get their money, according to both MI5 and CIA sources. “The SWIFT system has several operational and procedural features that allow anyone with big computing power, i.e. cabal controlled bank servers, to spot and arrest large transactions, especially over $50 million,” the MI5 source says. “SWIFT has in the past been temporarily disabled to allow Bush 41 to steal large transactions,” he adds. The lack of trust between different cabal factions has meant that opposing factions have been regularly hijacking each other’s bank transfers, the CIA source corroborates.



The recent shouting match between Christine Lagarde, the head of the IMF, and Deutsche Bank CEO Jurgen Fitschen, reported by Tom Heneghan, was almost certainly related to one such major hijacking of funds.

Also, more and more gold plated tungsten bars are being found in bank storage vaults worldwide. So far it can be confirmed that the IMF, The Bank of China, the Bundesbank and the Bank of England have all had some or all of their gold replaced with tungsten. This is leading to a frantic search for the missing gold by various governments. Perhaps they should follow Richard Armitage, who is now taking global collateral accounts gold from Indonesia and gold from royal vaults in Thailand, refining it in Hong Kong and taking it to parts unknown (Paraguay, the Antarctic?), according to a CIA source.

Two separate US sources, one FBI and one CIA, have both contacted this writer and said that a lady by the name of “Madame Wong” has been installed as Empress in China and placed in charge of the 85% of the world’s gold whose last legitimate owner was the Qing dynasty. This is strange to hear because my Chinese sources tell me the current heir to the Qing dynasty is a man by the name of Dr. Yi. Perhaps this is an attempt by certain parties to claim rights to the world’s treasure by using a proxy.

In any case, you cannot eat gold and technically owning 85% of the world’s gold does not automatically give a person the right to decide the future of humanity. That right belongs to the people of the world.

On that front, there seems to be a major power struggle coming to a head in the US. As mentioned above the founding families of the Federal Reserve Board in the US have either fled or are trying to flee in order to avoid imminent arrest, according to the CIA. There is also apparently some complicated plot brewing in which the Congress and the Senate will trigger their own demise by impeaching Obama, at least so the CIA is saying. After Obama is impeached, he will announce that he is just a spokesperson and the Vice-President Biden was actually sworn in as is actually President.

Following that, the members of the Congress and Senate will be arrested and Obama will be formally reinstated as President, the CIA says. At this point a systematic purge of traitors will begin and no more dual Israeli/US citizens will be allowed in government. Once that is done, the newly restored US Republic will legally and rightfully renounce debt owed by the private Federal Reserve Board consortium to the rest of the world, or so the story goes. Believe it when you see it.

What is real though is that top Bilderberger Queen Beatrix of the Netherlands has resigned. The CIA source in Europe who correctly predicted this says Queen Elizabeth will also resign soon in favour of her grandson William. MI5 could not confirm this. A Dutch intelligence source says Beatrix’s resignation was planned long in advance and was connected to the fact that she turned 75.

Here is what an Italian royal family member had to say about Queen Beatrix: “I know she has been part of a ‘consortium’ with the Pope, Queen Elizabeth, the Yamato Dynasty and Adam Hapsburg that has been and is still fighting the evil so called Illuminati.” A gnostic Illuminati source responds by saying they are not evil, just opposed to dynastic rule by Satanic bloodlines.

Speaking about Satan, there has been new intrigue in the Vatican. A certain Monsignor Egidio Vagnozzi died suddenly near the Vatican recently and was buried without an autopsy, according to an Italian aristocrat. Vagnozzi was pressing for a full investigation of the IOR – Instituto di Opere Religiose –Institute for Religious Works, i.e. the Vatican Bank. The “dark soul” behind the Vatican Bank is a Monsignor Donato de Bonis, the Italian aristocrat says. The Vatican Bank has been without a president for the past 8 months after a reformist president Ettori Gotti was controversially dismissed. Recently, credit card payments and ATMs in the Vatican have stopped because the Vatican bank is not complying with international money laundering regulations.

The Vatican Bank is reluctant to open its books to international scrutiny because massive bribes paid to senior politicians around the world would be exposed, according to several sources. The terms of the members of the oversight committee for the bank will expire on February 23rd. Let us see if the Vatican finally comes clean after that date.

One final note, a White Dragon Society member in Europe was attacked by two men with knives last week. The two men were beaten up and then arrested. They claimed they were paid $15,000 each by “Bilderbergers from Holland,” to kill that WDS member. They were amateurs, indicating the Bilderbergers are running out of professional talent.

U.S. to sue S&P over ratings ahead of financial crisis

(Reuters) - Standard & Poor's said it expects to be the target of a U.S. Department of Justice civil lawsuit over its mortgage bond ratings, the first federal enforcement action against a credit rating agency over alleged illegal behavior tied to the recent financial crisis.

Shares of McGraw-Hill Cos, the parent of S&P, plunged 13.8 percent on Monday after news of the expected lawsuit surfaced, their biggest one-day percentage decline since the 1987 stock market crash, according to Reuters data.


An announcement of a lawsuit is expected on Tuesday, a person familiar with the matter said.
The news also caused shares of Moody's Corp, whose Moody's Investors Service unit is S&P's main rival, to slide 10.7 percent.

It is unclear why regulators may be now focusing on S&P rather than Moody's or Fimalac SA's Fitch Ratings.

"This lawsuit is significant because it could augur future government action or, even worse for the agencies, more litigation by investors," said Jeffrey Manns, a law professor at George Washington University in Washington, D.C.

A civil case involves a lower burden of proof than a criminal case would, and could make it easier for investigators to uncover potential "smoking guns" through subpoenas, he added.


NO MERIT TO LAWSUIT, S&P SAYS

S&P said the expected Justice Department lawsuit focuses on its ratings in 2007 of various U.S. collateralized debt obligations.

The agency had previously disclosed a probe by the U.S. Securities and Exchange Commission into its ratings for a $1.6 billion CDO known as Delphinus CDO 2007-1. It was not immediately clear whether that CDO is a focus of the case.

"A DOJ lawsuit would be entirely without factual or legal merit," S&P said in a statement. "The DOJ would be wrong in contending that S&P ratings were motivated by commercial considerations and not issued in good faith."

In a variety of lawsuits brought by investors, S&P has maintained that its ratings constitute opinions protected by the free speech clause of the U.S. Constitution.

A Justice Department spokeswoman, Adora Andy, declined to comment. Moody's spokesman Michael Adler and Fitch spokesman Daniel Noonan also did not immediately respond to requests for comment.

Several state attorneys general led by Connecticut's George Jepsen are expected to join the case, said the person familiar with the matter, who was not authorized to speak publicly.

A spokeswoman for Jepsen declined to comment. The Wall Street Journal first reported the pending charges.

In Monday trading on the New York Stock Exchange, McGraw-Hill shares closed down $8.04 at $50.30, and Moody's shares dropped $5.90 to $49.45.

"KEY ENABLERS" OF MELTDOWN

S&P, Moody's and Fitch have long faced criticism from investors, politicians and regulators for assigning high ratings to thousands of subprime and other mortgage securities that quickly turned sour.

The rating agencies are paid by issuers for ratings, a standard industry practice that has nonetheless raised concern about potential conflicts of interest.

In January 2011, the Financial Crisis Inquiry Commission called the agencies "essential cogs in the wheel of financial destruction" and "key enablers of the financial meltdown."

McGraw-Hill had acknowledged last July that the Justice Department and SEC were probing potential violations by S&P tied to its ratings of structured products, and that it was in talks to try to avert a lawsuit.

Last July, Mizuho Financial Group Inc agreed to a $127.5 million settlement to resolve SEC allegations that a U.S. unit obtained false credit ratings for the Delphinus CDO. [ID:nL2E8IIDAL]
The following month, a Manhattan federal judge refused to dismiss a lawsuit brought by Abu Dhabi Commercial Bank, King County in Washington state, and other investors against S&P, Moody's and Morgan Stanley over losses in Cheyne, a structured investment vehicle.

Cheyne went bankrupt in August 2007. A trial is scheduled to begin on May 6, court records show.
In its statement, S&P said it "deeply regrets" how its CDO ratings failed to anticipate the fast-deteriorating mortgage market conditions, and that it has since spent $400 million to help bolster the quality of its ratings.

"The lawsuit itself may prove less significant than the message it sends," said Manns, the law professor. "Filing a high-profile lawsuit against S&P tells the rating industry at large that the government is serious about holding rating agencies responsible, and that they must be much more careful."

(Reporting by Sarah N. Lynch and Aruna Viswanatha in Washington, D.C. and Jonathan Stempel in New York; Additional reporting by Emily Flitter, Karen Freifeld and Caroline Valetkevitch in New York; Editing by Steve Orlofsky, Bob Burgdorfer and Tim Dobbyn)

Poof: February 4, 2013 - Bye Bye Cruel World

Greetings and Salutations;
 
Enough has happened and locked in to end this journey. So we’re off to see the ‘wizard’.

It pretty much took the ability to do right handed things with the left hand, to finish this job…the shifting of the world’s banking system. It took vast ‘commodities’ and unrelenting sticking to the task at hand. And a huge amount of focus to Not kill folks that (as they say) needed killin’. The arrogance was unbelievable, folks in circles that believe in their ‘right’ to lord it over everybody else who couldn’t see the truth when it was right at the end of their noses.

Game’s up dudes and dudettes, the earth is not yours, to do as you wish.There’s an old saying, ‘karma’s a bitch, then ya die’.

From hence forth, ‘munchkins’ will keep telling you to follow the yellow brick road, no worries about getting dazzled by the brilliance. Lower your head and take on what ever task you set for yourself. Dance forward on your path and do it in joy.

We aren’t going back, we are going forward. Going into the world created for these times. Much of what you will witness now, is folks passing because they can’t handle the change. Can’t deal with the fact that low frequency behavior is a thing of the past, like neanderthals having to deal with cro-magnon man. It took them a while to find out, they were actually living side by side for a while. Hmm, wanna make a comparison to the present?

There have been some alterations but it’s all wrapped up in the speed at which the big changes take place. The flooring had to be ripped All the way up. No half stepping. which is reverberating thru (Washington) DC right now.

Who is a good guy, who’s a bad guy, you’ll be finding out most directly. These announcements are so, the American people never let these past 100+ years, be repeated.

It’s All good and you will hear it with your own ears, soon enough. Time to go ‘poof’.

Love and Kisses;
Poofness

A MESSAGE FOR ALL OF HUMANITY

his includes a portion of Charlie Chaplin's amazing speech in "The Great Dictator" that is usually cut out of most versions I have seen on youtube and was even cut out of mine. I think this portion of the speech is largely under-rated, and really completes the speech as a whole. Thus I thought after the success of my last version, I may as well make an extended version with the entire speech in it. Enjoy!

by Tragedy and Hope

Banking system must be 'reset’, says Osborne

The Chancellor pledges today to “reset” Britain’s banking system, warning that banks will be broken up if they ignore orders to ringfence their investment and retail banking divisions.

By Graham Ruddick

6:25AM GMT 04 Feb 2013

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/9846197/Banking-system-must-be-reset-says-Osborne.html

George Osborne will reveal that the Coalition intends to “electrify” the ringfence that will separate the day-to-day retail operations of a bank from its potentially riskier investment banking division.

This means that, if banks are judged by the new Prudential Regulation Authority to be trying to flout the rules, the Government will have the power to order a complete break-up of the bank.

The idea of toughening the ringfence is the brainchild of Andrew Tyrie, chairman of the Parliamentary Commission on Banking Standards.

However, the proposals have already attracted opposition from the banking industry, with the British Bankers’ Association calling the move “regrettable”.

Anthony Browne, chief executive of the BBA, said last night: “This will create uncertainty for investors, making it more difficult for banks to raise capital which will ultimately mean that banks will have less money to lend to businesses.

“No other major economy is considering moving away from the universal model of banking because it undermines banks’ ability to provide all the services businesses need.

“This decision will damage London’s attractiveness as a global financial centre.”

Mr Osborne is expected to say that “electrifying” the ringfence will allow the Government to “arm ourselves in advance” in case banks try to flout the rules.

“We’re not going to repeat the mistakes of the past,” he will add, in a speech at JP Morgan’s offices in Bournemouth.

The legislation, which builds on the recommendations of the Independent Commission on Banking, is being sent to Parliament today and should be law within a year.

“Our country has paid a higher price than any other major economy for what went so badly wrong in our banking system. The anger people feel is very real. Lets turn that anger from a force of destruction into a force for change,” Mr Osborne will say.

“Change that will give us a banking system that will work for us all. In 2013, thanks to the changes we are making, that goal is in sight.”

On top of the new legislation, Mr Osborne will say that he is also overhauling the regulatory system to give the Bank of England more powers, examining the culture and ethics of banking, and seeking to improve competitiveness by making it easier to switch bank accounts.

It is thought that from September, customers could be able to switch account to a rival within a week.

Speaking about the old system of regulation, he will claim: “The fire alarm was ringing, but no one was listening. And when the crisis hit, the fire was then so great that the whole economy was sacrificed to put it out. The British people need to know that lessons have been learnt. And they have.”

Despite increasing the regulatory oversight of banks, Mr Osborne will also seek to highlight the importance of the industry to the economy – which is why, he says, the speech will be given from the offices of JP Morgan, the largest employer in Dorset.