The Federal Reserve banking system went down in earlier trade but the says the issue impacting central bank applications has been resolved and users may resume normal access.
Key statements published by Reuters
Says access to FedCash services via the Fedline web solution has been restored.
Says extending the cash order deadline for FedCash services to 3:30 p.m. local time of the servicing federal reserve bank.
Says it in process of restarting the FedWire services and national settlement service and expect to resume normal processing this afternoon.
Says plan to extend cutoff times for FedWire securities service, may also extend cutoff times for national settlement service and FedWire funds. service.
Says Fedwire funds service, FedWire securities service, and national settlement service have resumed processing and are operating normally.
Says Fedwire securities service has extended for FRB services issue until 3:15 p.m. eastern time for original issuance.
Market implications
Ultimately, this has no implications to the market given that it is seen to have been resolved,
With that being said, any prolonged delays to normal operations could otherwise squeeze the US shorts.
Designated clearinghouses can have access to Federal Reserve bank accounts and services such as FedWire – a settlement service forming part of the federal safety net.
In many ways, designated clearinghouses are the new “Too Big To Fail” banks.
Presumably, the US swap lines could be impacted resulting in a repeat of the US dollar funding tensions and the swap line crises of both 2008 and the start of 2020.
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