Enlarge /. The Federal Reserve Building in Washington, DC.
The Federal Reserve's electronic systems, which allow US banks to send electronic payments to one another, had a massive outage on Wednesday afternoon. A Fed statement attributed the outage to an "operational bug" but did not provide much more detail.
The Federal Reserve System acts as America's central bank and controls much of the plumbing in the US financial system.
The Automated Clearing House (ACH) system is used for paychecks, bill payments, and other small and medium-sized transactions across the economy. The Check 21 system is used to clear paper checks. It takes a day or two for these transactions to complete.
The Fedwire system is used to instantly transfer large sums of money from one bank to another. The system moves more than $ 3 trillion on an average day.
All of these systems and a few others were out of service for more than an hour on Wednesday afternoon.
By 3:30 p.m. on Wednesday, most of these systems were back up and running, but the Fed warned banks that it would take time to deal with a backlog of transactions through their system. The Fed urged banks to verify that all of the transactions they had filed in the past few hours were actually going through.