How does SSL and Squid work ? I believe Squid bypasses a SSL request and sends it direct so there is no need to include your proxy in your SSL settings of you web browser. I am reffering to internet banking in particular here.
SSL proxying through squid works by setting up a transparent connection between the client and server through the proxy. Nothing is cached, it works in a similar fashion to a router, albeit at application level rather than network level. Since the encryption is done end-to-end between client and server, the proxy sees only the encrypted traffic, which would not be very useful to an attacker if the proxy was compromised.
Paul.