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Fed
Wire (Federal Wire):
The Fed Wire electronic transfer system is a
network linking together the Federal Reserve Board of Governors, the Federal
Reserve Banks and branches, the U.S. Treasury Department, and other federal
agencies. It is used for the transfer of funds only! It is used by the Reserve Banks and the Treasury
for large dollar time-sensitive payments, such as funds transfers between CORRESPONDENT
BANKS, and sales of book entry U.S. government securities.
Federal Reserve member banks and other depository financial institutions also
have access to the Fed Wire network, and they use it to perform their own
interbank transfers and monetary transfers for their customers.
There is no such thing as a "Conditional Fed Wire"
(see CONDITIONAL S.W.I.F.T.).
A Fed Wire can be sent with instructions in the form of a separate fax referring
to the funds transfer by name, amount, transfer code, etc.
Supposedly, if the receiving bank cannot comply with the instructions, then it must contact the sending bank.
CAUTION: Just because it is the duty
of the receiving bank to notify the sending bank that it cannot comply with
instructions doesn't mean that you are guaranteed that this will happen.
Due to circumstances beyond the sending bank's control, particularly if the
receiving bank is outside U.S. borders, a simple acknowledgment of receipt may
arrive with no other notification. You are not
safe to assume that the instructions sent were legal, compliable,
or even financially feasible.
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