ÆäÀÌÁö À̹ÌÁö
PDF
ePub

APPENDIX I-CHECK PROCESSING SYSTEMS

Approximately 22 billion checks are handled annually by commercial banks. Approximately 1/3 of all checks are written by depositors in one bank for the credit of depositors in the same bank. Another 1/3 of all checks are written for depositors in the same city or marketing area. These checks are exchanged directly among the banks, most often through the facilities of local clearing houses.

The remaining 1/3 of all checks go outside the local area. Most of these checks are distributed through the facilities of the Federal Reserve System (FRS) or by "direct sending" arrangements which banks establish among themselves when check and dollar volumes warrant.

Federal Reserve System

The map on the next page shows the twelve FRS districts, the locations of FRS banks and branches. The FRS receives the deposit of checks from banks on established daily schedules and grants funds valued after today to the banks based on when the checks will be returned to the banks on which they are drawn. The funds for checks drawn on banks in cities where a FRS bank or branch is located usually are credited in funds available tomorrow to the depositing banks. Checks drawn on other points designated "country banks" are usually valued a day or so later depending on the location.

To speed up the flow of funds through the check processing system, the FRS has recently made two major changes. One change is the establishment of Regional Check Processing Centers (RCPC's) to speed up the movement of checks over wide geographical areas. The first RCPC covered a radius of 40 miles around Washington, D.C. Checks presented to the RCPC in the evening and early morning are returned to the bank on which they are drawn in the morning. Organizations depositing checks drawn on banks in the RCPC area receive funds valued tomorrow, where previously the movement of checks often took several days. RCPC's are being established throughout the country where check exchange facilities are not available.

The second major modification to the check processing system occurred in November, 1972, with the change in the FRS's Regulation J. This regulation requires that all banks settle checks with the FRS on the day presented in funds valued today. Previously, "country banks" had been allowed one additional day or allowed to settle in funds valued tomorrow. This change puts all banks, regardless of location, on an equal basis in settling checks and reduces the amount of FRS checks in the process of collection-or "float" as it is usually called.

THE FEDERAL RESERVE SYSTEM

BOUNDARIES OF FEDERAL RESERVE DISTRICTS AND THEIR BRANCH TERRITORIES

[merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][ocr errors][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small]

Boundaries of Federal Reserve Districts

LEGEND

-Boundaries of Federal Reserve Branch Territories

Board of Governors of the Federal Reserve System

• Federal Reserve Branch Cities

O Federal Reserve Bank Cities

· Federal Reserve Bank Facilities

APPENDIX II-FEDERAL RESERVE SYSTEM'S WIRE NETWORK

Banks which are members of the FRS maintain deposits with the FRS for reserve against their time and demand deposits. Until modifications were implemented in the FRS's Regulation D in November, 1972, banks maintained different percentages of reserves based on whether they were designated "Reserve City Banks" because they were located in cities with FRS banks, or whether they were designated "country banks" because of their location in other cities. The modification of Regulation D standardized all reserves to be based on the following schedule:

[blocks in formation]

Every Wednesday, based upon the average of the daily balances for the preceding two weeks, the FRS member banks settle their reserve position with the FRS, which should be within a range of plus or minus 2% of their reserve position needs. If a particular bank needs funds, it can purchase Federal Funds. Those with excess Federal Funds can sell their excess funds. Excess funds left on deposit at the FRS are non-earning assets, while shortages can lead to disciplinary action by the FRS. Non-members of the FRS can maintain their reserve positions with other banks. The FRS moves funds (as well as ownership of Treasury Instruments) on its Wire Network with the schedules for transactions in the various time zones, as shown on the following table:

[merged small][merged small][merged small][merged small][graphic][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small]

The FRS Wire Network is controlled through an electronic switching computer located at Culpeper, Virginia, which connects the FRS Board of Governors and all of the FRS banks and branches. The messages are formatted with the four digit transit numbers and four digit routing numbers shown on the bottom of checks to designate individual banks. Participating banks use M-37 telegraphic type terminals to transmit transactions through their local FRS bank offices and into the network. This network is presently used for the transmission of funds valued today. "The Federal Reserve Communications System" in this Appendix describes in more detail the capabilities of this system. A map below shows the location of this network which has the ability to transmit data on magnetic tape in addition to the M-37 traffic.

[blocks in formation]

THE FEDERAL RESERVE COMMUNICATIONS SYSTEM

by Albert D. Tinkelenberg,

Vice President

Federal Reserve Bank of Richmond

The present Federal Reserve System is a direct result of over thirty years communications system development within the Federal Reserve System. The immediate predecessor of our present system was an 81-D-1 torn tape system at the Federal Reserve Bank of Richmond using M-19 teletype terminals at Federal Reserve Offices throughout the country. The new communications system became operational in August, 1970. The heart of the communications system is an M1000 Communications Switch which serves the teletype network, a magnetic tape network and a computer network. The system is a central store and forward communications system with all traffic routed from the originating location to the store and forward switch at Culpeper and then it is routed to the addressee station. Current system throughput is about 45,000 messages throughput/day (input plus output).

The teletype network includes 77 150 baud circuits with traffic to 40 locations around the country. Approximately 143 M-37 terminals are in use throughout the system. These terminals are the newest Teletype terminal which provides 150 words/minute using 150 baud communication lines. The M-37 terminal has a standard typewriter keyboard and as used in the Federal Reserve Communications System provides a typed copy of each message with the message identification at the originating terminal. The teletype terminals are used for transmission of funds transfers, commonly referred to as wire transfers; security transfers (CPD's); and Admin messages. Percentage-wise these provide 70%, 10% and 20% of the traffic respectively.

The second network included within the communications system is a magnetic tape network which uses thirteen 2400 baud circuits to all Federal Reserve District Head Offices and to the Federal Reserve Board of Governors in Washington. At each of these locations, an IBM 2968-7 tape transmission terminal is used. These terminals and circuits are used for the transmission of economic data from all the Federal Reserve Districts to the Board of Governors and to the Research Department at the Federal Reserve Bank of New York. Transmissions may be routed through the M1000 Communications Switch or they may be routed through circuit patching or via circuit switching directly from one location to the other.

The third network, the computer network, is actually a replacement for selected portions of the teletype network. Communications processors are now in use at several Federal Reserve Banks (FRB) with plans for each of the twelve FRB's to have computer switches installed by 1974. For example, the FRB of Chicago uses a Control Data M1000, FRB of San Francisco uses an IBM 360/30 especially programmed to handle communications, FRB of Cleveland uses twin IBM 360/30's and FRB of New York has an XDS Sigma 5. The communications processors connect to Culpeper and serve local communications networks at the Federal Reserve city. Using the computer network, funds transfers from the Bank of America in San Francisco are sent to the Federal Reserve Bank of San Francisco communications processor which in turn sends the messages automatically to Culpeper. Culpeper then polls the Chicago communications processor and routes the message to Chicago which would route the message from Chicago Bank over to, say, the Continental Bank in Chicago. In this case, the message would be routed automatically through three communications processors without any manual intervention. It is an objective of the Federal Reserve System to have all Federal Reserve District Offices connected in this manner for high speed (approximately 300 characters/second) communication with Culpeper and for automatic handling of message preparation and message processing at each office.

The M1000 Communications Switching System at Culpeper is a specially designed computer, designed to provide very rapid input and output. The system uses four computers called M1000 exchange units. With each exchange unit (EU) are core memory and fast disc plus secondary storage on disc packs and magnetic tape. As a message enters the system through a line group, it is routed into the exchange unit and immediately recorded on disc storage. After it is recorded on the disc, an acknowledgment is sent back to the originating terminal. The addressed terminal is then polled to determine if it is available for receipt of a message. If the polled terminal is in operating condition, and is not already busy with other traffic, the message is sent to it. While the traffic is waiting to be delivered, it may be stored on a fast access disc within the exchange unit; or on disc packs. As traffic is delivered to the addressee, it is recorded on disc packs and on magnetic tape. The disc pack storage provides a capability for rapid retrieval of a message by a receiving station during the day that the message is delivered. The magnetic tape record of the traffic is a permanent history of all traffic delivered. In most cases, Culpeper keeps the magnetic tapes with delivered traffic for thirty days.

« ÀÌÀü°è¼Ó »