High-speed electronic communications network linking the Federal Reserve Board of Governors, the 12 Federal Reserve Banks and 24 branches, the U.S. Treasury Department, and other federal agencies. The Federal Reserve Wire Network, more commonly known as Fed Wire, is used by the Reserve Banks and the Treasury for high-value time-sensitive payments, such as funds transfers between reserve banks, purchases or sales of Fed Funds transfers between correspondent banks, and sales of book entry U.S. Government securities.
Federal Reserve Member Banks and other depository financial institutions also have access to the Fed Wire network to their own account and in transferring funds on behalf of a customer, when timeliness and certainty of payment are important. The Treasury Department and federal agencies make extensive use of the Fed Wire in collection of funds from Treasury Tax and Loan Accounts in commercial banks, and in disbursement of funds.
Fed Wire transfers are immediate transfers of funds, and are effective usually within minutes of the time a payment is initiated. They are guaranteed as final payments when the receiving financial institution is notified of the credit to its reserve account. See also Automated Clearing House; Clearing House Interbank Payments System; Society for Worldwide Interbank Financial Telecommunications.
