Investigation ongoing
The Federal Reserve payment system is down. The system allows banks to send money back and forth. According to sources, the interruption impacted the pivotal automated clearinghouse system, which connects depositary and related institutions and allows them to send electronic credit and debit transfers.
Other systems impacted includes:
- Check 21
- FedCash
- Fedwire
- National settlement service
The staff is currently investigating.each
Each day the member banks of the Federal Reserve need to maintain a minimum reserve requirement. Those funds are transferred back and forth between banks with needs and those with access funds. The Federal Reserve can keep the bank wire open if there are disruptions, but all banks must square their account at the Fed and have the appropriate reserves on deposit at the Fed at the end of the day.
If there are problems, the member banks can borrow money from the discount window to bridge short-term liquidity needs.
I'm not sure if the dip in equities off the high seen recently is as a result of the news, but there has been a modest dip in the S&P and NASDAQ indices. The Dow industrial average still remains close to its high at 32009.64. The index is at 31941.29 but still up 403 points on the day.
UPDATE: The Fed says it is restoring services, communicating with customers, and that a "operational error" disrupted several services.
