Entire Federal Reserve Payment System Crashes Due To "Operational Error"
Entire Federal Reserve payment system CRASHES due to 'operational error' freezing $3trillion in daily transactions including paychecks, tax refunds and bill payments
February 24, 2021
All Federal Reserve settlement services suffered disruptions on Wednesday
The key banking systems were offline for more than three hours
Fed says that the massive outage was caused by an 'operational error'
Systems affected form the backbone of US banking and financial sector
Fedwire is used by banks to transfer an average of $3.3 trillion every day
FedACH handles smaller transactions such as paychecks and tax refunds
A view of The Federal Reserve Bank of New York Building at 33 Liberty Street
The Federal Reserve payment systems used to settle transactions between U.S. financial institutions suffered a massive disruption due to an 'operational error'.
The system used by U.S. banks to execute some $3 trillion in transactions daily began suffering outages at around 11.15am Eastern time on Wednesday, and remained down for more than three hours.
Most of the key systems, including the backbone settlement services Fedwire and FedACH, were back online by 3pm, but the Fed acknowledged that 'payment deadlines are impacted'.
Our technical teams have determined that the cause is a Federal Reserve operational error. We will provide updates via service status as more information becomes available,' the Fed said in a service alert at 2.14pm.
The potential impacts on consumer banking services were not immediately clear. A spokesperson for the Federal Reserve did not immediately respond to an inquiry from DailyMail.com.
Among the affected services was Fedwire, the system for large transfers between banks which last year handled 184 million transactions totaling more than $840 trillion, or more than $3.3 trillion daily, according to Fed data.
Other affected systems included FedACH, the clearinghouse which generally handles smaller transactions such as paychecks, tax refunds, and utility bill payments.
The National Settlement Service (NSS), used by depository institutions with Federal Reserve Bank master accounts, was also knocked offline.
Every other transaction service maintained by the Fed was also affected by the disruptions.
In a series of service alerts, the Fed said that its staff first became aware of a 'disruption for all services' at around 11.15am.
'The Federal Reserve Bank staff is currently investigating a possible issue or disruption to multiple services,' the Fed said in an alert at 12.43 pm.
An update at 1.18pm confirmed the disruption and added 'We will continue to provide updates as soon as they are available.'
'We acknowledge that payment deadlines are impacted and will communicate remediation efforts to our customers when available,' the Fed said in a service alert. 'Thank you for your patience while we work to resolve the issue.'
Applications for the Central Bank, the bank-of-banks where financial institutions deposit funds, were back online as of 2.17pm.
By 2.46pm, Fedwire resumed processing as normally. FedACH was back online by 2.55pm.
'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,' the Fed said in an alert.
The Fed said that it would extend settlement deadlines on Wednesday to allow banks to clear the backlog of transactions that piled up during the outage.
It was not immediately clear whether the disruption would delay bill payments or paycheck deposits for consumers.
https://www.dailymail.co.uk/news/article-9296385/Entire-Federal-Reserve-payment-CRASHES.html