As Radoslaw says in his post, RACF and the usual Z host security is indeed 
very, very good, but they do not protect you against everything.  For example, 
an insider attack by a sufficiently-authorized person could disclose keys 
protected by RACF - there are people who can get to data on disk or in memory, 
even though it has things like RACF protection - and there are probably people 
with authority to remove the RACF protection.  When your keys are protected by 
the Crypto Express HSM, none of those attacks are possible.  Once the keys are 
under protection of the Crypto Express HSM, there is no way to see them except 
in encrypted form.  The HSM has no functions to give you the key in unencrypted 
form, and any attempt to attack the HSM itself (e.g. opening it and reading its 
internal memory) will cause immediate destruction of the keys it contains, 
which makes the externally-stored encrypted keys unusable.

So - the amount of security you need depends on your application.  For many 
people, it is sufficient to use CPACF with cleartext keys, where the keys are 
protected in ways like you described.  Other people want more protection, and 
they use Protected Keys with CPACF - in that case, the keys are protected by 
the Crypto Express, but they are used by CPACF to give you higher performance.  
Other people, who want the highest possible degree of security, use the Crypto 
Express to protect the keys and to perform the cryptographic operations that 
use them.

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