Federal Reserve Reports Several Business Lines Disrupted by 'Operational Error' -- 2nd Update
February 24 2021 - 3:13PM
Dow Jones News
By Paul Kiernan
The Federal Reserve said Wednesday that an "operational error"
disrupted services in several of its business lines, including the
electronic settlement system used by banks, businesses and
government agencies.
"A Federal Reserve operational error resulted in disruption of
service in several business lines. We are restoring services and
are communicating with all Federal Reserve Financial Services
customers about the status of operations," said Jim Strader, a
spokesman for the Fed's Richmond reserve bank, said in an emailed
statement.
In addition to setting monetary policy, one of the Fed's
lesser-known roles includes acting as a bank for the nation's
banks, as well as for the U.S. Treasury Department. It provides
services including collecting checks and electronically
transferring funds, and by selling and redeeming Treasury
bills.
The Fed sent an alert to such customers at 12:43 p.m. ET of "a
possible issue or disruption to multiple services." In a subsequent
alert, it said Fed staff became aware of "a disruption for all
services" beginning around 11:15 a.m.
"We acknowledge that payment deadlines are impacted and will
communicate remediation efforts to our customers when available,"
the alert said.
One of the services taken offline was the Fedwire Funds Service,
which the Fed describes as "the premier electronic funds-transfer
service that banks, businesses and government agencies rely on for
mission-critical, same-day transactions." Entities use the service
to send or receive payments, settle positions with other financial
institutions and to submit tax payments, among other
activities.
In a notice sent to banking regulators, a Treasury Department
official said the disruption "required a reboot of servers
impacting all payment channels," adding that service would be
restored Wednesday afternoon.
"While root cause is currently being evaluated, there is no
indication that the issue is the result of a cyberattack," the
official noted.
Write to Paul Kiernan at paul.kiernan@wsj.com
(END) Dow Jones Newswires
February 24, 2021 14:58 ET (19:58 GMT)
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