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It's done to escape from iFrame jail attempts. Rogue site loads bank site in iFrame, end user types in their password...

Browsers are not supposed to let javascript access the DOM or events in a cross-domain iframe, is that not correct?

Correct, but it's still possible for the parent page to overlay invisible textboxes and buttons in order to capture input.

Wow, what a tire fire the web has turned out to be.

Can we just throw the whole thing out and start over? I miss the 90s...

Why not implement a good 2FA then to avoid the problem entirely? The way I see it if someone can steal your bank login details using iframes as a weapon then the bank is doing something wrong. Banning pop-ups entirely would force the banks to shape up

Isn't it easier to set X-Frame-Options to deny or sameorigin?

Yes, absolutely. But that didn't work on some older browsers (like MSIE7 and earlier), so some sites settled on weird "solutions" like this one...

No idea. It just gets caught by the pop-up blocker for me. I end up just copy-pasting the URL over into a new tab, somehow.

When it comes to web software at banks, there's rarely a good reason "why". They build some of the worst garbage you can find.