Payment System Risk
Payment System Risk
Last Updated: 12.01.2025
Institutions that maintain master accounts with the Federal Reserve Banks (Reserve Banks) are required to comply with the Federal Reserve Policy on Payment System Risk (PSR policy) which addresses the risks that payment, clearing, settlement, and recording activities present to the financial system and to the Reserve Banks.
The following resources provide information on the PSR policy and the tools that institutions can utilize to help manage payment system risk:
- Overview of the PSR policy and Guide to the PSR policy
- Press releases and federal register notices concerning the PSR policy
- Frequently Asked Questions
- Account Management Guide outlines Reserve Bank account structure, concepts of reserve calculation and maintenance, terminology, tools, and other specific information related to the ongoing administration of reserve accounts.
- Accounting Services provides information on reports that institutions can request for their master accounts and also Account Management Information (AMI) which is an online tool that allows institutions to view near real-time information such as the master account balance and collateral balances.
To reduce risk across Federal Reserve Payment Services, the Federal Reserve Banks have allowed certain domestic financial institutions to voluntarily participate in a real-time credit monitoring program (“Real-time Monitoring Program”). Participation in the Real-time Monitoring Program may help mitigate the financial risk of Fedwire® Funds payments that result in an account overdraft, or exceed an institution’s intraday credit capacity pursuant to the PSR Policy. By rejecting Fedwire Funds transactions or preventing certain transactions from being processed, the sending institution has an opportunity to verify authorization and pre-fund the transaction, thereby reducing or limiting the financial risk to the institution.
If your institution desires to opt out of the Real-time Monitoring program, an individual listed on your institution’s Operating Circular 1 (OC 1) Official Authorization List should complete an Opt Out Submission Form. If your depository institution wishes to opt back into the program, simply complete the Opt In Submission Form.