The Federal Reserve said on Wednesday that an “operational error” disrupted services across several of its business lines, including the electronic settlement system used by banks, companies and government agencies.
“An operational error by the Federal Reserve resulted in service interruption in several lines of business. We are restoring services and communicating with all Federal Reserve Financial Services customers about the status of operations, ”said Jim Strader, a spokesman for the Fed’s reserve bank in Richmond, in an emailed statement.
In addition to defining monetary policy, one of the Fed’s lesser-known functions includes acting as a bank for the country’s banks, as well as for the United States Department of the Treasury. It provides services, including the collection of checks and the electronic transfer of funds and the sale and redemption of Treasury bills.
The Fed sent an alert to these customers at 12:43 pm Eastern Time, about “a possible problem or interruption of several services”. In a subsequent alert, he said that the Fed team became aware of “an interruption to all services” starting around 11.15 am
“We recognize that payment terms are affected and will communicate remediation efforts to our customers when available,” said the alert.
One of the offline services was the Fedwire Funds Service, which the Fed describes as “the main electronic funds transfer service on which banks, companies and government agencies depend for critical same-day transactions”. Entities use the service to send or receive payments, settle positions with other financial institutions and make tax payments, among other activities.
In a notice sent to bank regulators, an official at the Treasury Department said the outage “required a restart of the servers, affecting all payment channels,” adding that the service would be restored on Wednesday afternoon.
“Although the root cause is being assessed, there is no indication that the problem is the result of a cyber attack,” noted the official.
Write to Paul Kiernan at [email protected]
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