A technical error at the Federal Reserve halted millions of transactions

A major internal IT breakdown at the Federal Reserve knocked out many of the US’s most important payment systems for several hours on Wednesday. The cause of the error is still unknown, but US authorities do not suspect a cyber attack.

Her heart The US propulsion system remained steady for several hours on Wednesday.

Shortly after lunch local time, the Federal Reserve announced that all internal systems were down. The cause has been described as an “operational problem” with the central bank, but the Fed did not want to comment on the crash in more detail.

A spokesperson for Richmond Fed Bank, in charge of the central bank’s IT operations, is required in an email to the news agency. Bloomberg He did not comment on Wednesday on whether the problems were caused by a system update or the human factor.

On Wednesday, however, the US Treasury did not see any indications that the problems were caused by a cyberattack, according to a statement directed at other organizers such as the newspaper. Wall Street Journal part of.

Most systems worked again in the afternoon, while some services were delayed until the evening.

Among other things, Fedwire Funds, the service used for transactions between large financial institutions such as banks, was affected. Fedwire handles $ 3.323 billion in daily transactions, equivalent to more than SEK 27.4 trillion, according to central bank statistics.

Problems hit Also the central bank’s clearing organization, which handles more than 62 million transactions with a total value of about $ 112 billion, or 924 billion SEK per day, according to the Federal Reserve. The clearinghouse handles everything from salary payments to amortization payments and electricity bills.

READ  The first doses of the Pfizer vaccine will be given on Tuesday

The two services experienced widespread interruptions in 2019. However, this happened on two separate occasions, unlike Wednesday’s troubles, which thus included all the internal systems.

There are currently no indications that Wednesday’s troubles are causing any major problems for US banks. Timing is however an issue as millions of Americans are being paid every week. It could take up to two days to approve payments through the current Federal Reserve system, which could lead to delays, among other things, in salary payments. On Wednesday, the central bank extended Fedwire business hours, among other things, to avoid delays in transactions.

“We understand that deadlines will be affected and will pass on corrective actions to our clients,” the Fed wrote in one of its updates during the Wednesday downtime.

The Federal Reserve is currently developing a new payment system that would enable instant payments, similar to the systems that were already introduced in the UK, for example. However, it is not expected to launch until 2023 at the earliest.

The Swedish Riksbank has entered into an agreement to join the Eurosystem for instant payments, which will make it possible to carry out larger amounts of small payments around the clock. The goal is for the system to be implemented in 2022 according to the latest Riksbank update.

Leave a Reply

Your email address will not be published. Required fields are marked *