The Federal Reserve Wire Network
HOW A FEDWIRE WORKS:
Fedwire stands for Federal Reserve Wire Network. It is a high-speed electronic communications network that links the Federal Reserve Board of Governors, the 12 Federal Reserve Banks and the 24 branches, the U.S. Treasury Department, and other federal agencies.
A Fedwire is an electronic transmission. One can only look at a print-out of the actual transmission. The transmission contains inter-bank codes that are changed continually, a reference number, the names of the sending and receiving banks, the transfer amount, and the name and account number of the sending account holder and the receiving account holder. And that's all. The crediting and debiting of Federal Reserve accounts is understood. It is not a required part of the transmission. There are no instructions, no conditions, no words at all that are not part of an account name or bank address. Unless you are on the sending or receiving end of Fedwire funds and want to verify the transmission for some reason, the print-out is not very interesting.
Fedwire is used for
> Large dollar time-sensitive payments
> Funds transfers between reserve banks
> Purchases or sales of Federal Funds transfers between correspondent banks
> Sales of book-entry U.S. Government securities
> Collection of tax and loan accounts in commercial banks
> Funds disbursement
> Federal Reserve Member banks
> Financial institutions that have depository accounts with the Federal Reserve
> Foreign banks located in the U.S.