Federal Reserve Reports Business Lines Disrupted by ‘Operational Error’

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 [email protected]