Risk related to the management of the reserve account and the payment system

How can financial institutions access information on reserve balances and the amount of interest earned?

Reserves Central provides resources and tools to help financial institutions access information about reserve balances and related calculations, such as the amount of interest earned on those balances. From Reserves Central, financial institutions can view their reserve balances and drill down into interest calculations.

What is the Term Deposit Facility?

The Term Deposit Facility (TDF) is a program under which the Federal Reserve offers term deposits to institutions eligible to receive interest on balances they maintain at the Reserve Bank. An eligible institution can place funds at its reserve bank in a term deposit for an agreed number of days and reduce the amount of reserves it holds.

What are excess balance accounts?

Excess balance accounts are limited-use accounts for maintaining excess balances of institutions that are eligible to earn interest on Federal Reserve bank balances. Participating Eligible Institutions (“Participants”) authorize another institution (“Agent”) to administer the Excess Balance Account on their behalf.

Are the reserve requirements still in effect?

On March 15, 2020, the Board of Governors reduced reserve requirement ratios to zero percent effective March 26, 2020. This action eliminated reserve requirements for all deposit-taking institutions.

Effective March 11, 2021, the Reserves Central app has changed to reflect the elimination of reserve requirements and streamline information for users. Links to bookable liabilities will be disabled for maintenance windows after March 10, 2021. Additionally, detailed links on required reserve balance will be disabled going forward, as all required reserve ratios are set to zero for hundred.

Resource pools

What is the Payment System Risk Policy (PSR) of the Federal Reserve Board of Governors?

  • The PSR policy addresses the risks that payment systems pose to Federal Reserve Banks, the banking system, and other sectors of the economy.
  • One element of the PSR policy is to govern institutions’ use of Federal Reserve intraday credit, also known as daylight overdrafts.
  • A daytime overdraft occurs when there are insufficient funds in an institution’s reserve account to cover account debits, Fedwire funds transfers, inbound Fedwire securities transfers, or other payment activity processed by a reserve bank. , such as check or Automated Clearing House (ACH) transactions.

Payments System Risk Resources

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