for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up
Banks

Fedwire resumes operations after hourslong disruption

FILE PHOTO: The Federal Reserve building is pictured in Washington, DC, U.S., August 22, 2018. REUTERS/Chris Wattie

(Reuters) - The Federal Reserve says its Fedwire Funds, Fedcash and some check clearing services have resumed normal operations after a more than three-hour disruption to more than a dozen critical central bank payment services forming the backbone of the U.S. banking system.

The National Settlement Service and the Fedwire Securities Service, which provides issuance, settlement and transfer services for Treasuries and other government securities, have also been restored, the Fed said.

“Our technical teams have determined that the cause is a Federal Reserve operational error,” the Fed said on Wednesday on its website. “The Federal Reserve Banks have taken steps to help ensure the resilience of the Fedwire and NSS applications, including recovery to the point of failure.”

Staff first became aware of a disruption to services at 11:15 a.m. ET (1615 GMT), it said.

As of 2:58 p.m. its website was still reporting an “alert” status for several of its service areas.

The affected services facilitate check clearing and allowing billions of dollars of payments to flow daily through the financial system.

Fedwire Funds is “the premier electronic funds-transfer service that banks, businesses and government agencies rely on for mission-critical, same-day transactions,” the Fed says.

Fedwire Funds in December handled more than 835,000 transactions a day on average, with a daily average dollar volume of $3.4 trillion.

CHIPS, a private-sector alternative to Fedwire run by The Clearing House, continued to operate normally, spokesman Greg MacSweeney said shortly after 2 p.m. ET. CHIPS handles about $1.5 trillion a day, according to its website.

Reporting by Ann Saphir, Dan Burns, Howard Schneider, Jonnelle Marte and David Henry; Editing by Chizu Nomiyama and Andrea Ricci

for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up