US Fed probing ‘operational error’ that halted bank transfers

The United States Federal Reserve on Wednesday said it is restoring services disrupted by an “operational error” that resulted in outages for a dozen areas, including cheque clearing and Fedwire, which handles trillions of dollars in transactions daily for the world’s biggest banks.

“A Federal Reserve operational error resulted in disruption of service in several business lines,” the Fed said in an emailed statement. “We are restoring services and are communicating with all Federal Reserve Financial Services customers about the status of operations.”

The Fed first reported potential problems with the services at 12:43pm EST (17:43 GMT). As of 2:09pm (19:09 GMT), its website reported an “alert” status for Fedwire, FedACH, and 11 other areas.

The affected services form the hidden backbone of the US banking system, facilitating cheque clearing and allowing billions of dollars of payments to flow daily through the financial system.

Fedwire 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.