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Looking at Fedwire® Funds Service - Monthly Statistics it appears that these transactions are between banks but I'm trying to confirm is whether the stuff they are exchanging is classified as reserves. That is, FR liabilities shown in "Deposits with F.R. Banks, other than reserve balances" in H.4.1?

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When sending a payment order to the Fedwire Funds Service, a Fedwire participant authorizes its Federal Reserve Bank to debit its master account for the amount of the transfer. If the payment order is accepted, the Federal Reserve Bank holding the master account of the Fedwire participant that is to receive the transfer will credit the same amount to that master account. Each payment order sent through the Fedwire Funds Service is processed individually upon receipt through an encrypted electronic network.

The above came from the Fedwire product sheet.

So yes, it is a transfer of a balance held at a Federal Reserve bank.

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  • $\begingroup$ With regard to, "So yes, it is a transfer of a balance held at a Federal Reserve bank," my question was whether the balances are classified as excess "reserves" as opposed to something else. The FR has liabilities expressed in H.4.1 of which $1.39 Trillion are classified as “Deposits with F.R. Banks, other than reserve balances”. So are the "excess reserves” what are being exchanged when looking at the transactions of Fedwire? $\endgroup$ – JohnGalt May 21 at 15:18
  • $\begingroup$ It's a balance at a Federal Reserve bank. At the end of the day, balances are either there to meet reserve requirements, or it is in excess of reserve requirements (since the Fed is unhappy with banks that have a deficiency). The determination whether end-of-day balances for a particular bank is in excess of requirements has no effect on the transfer between banks. $\endgroup$ – Brian Romanchuk May 21 at 15:26
  • $\begingroup$ That makes sense. Also the distinction is irrelevant at present since the reserve requirement was lowered to zero in March. I'd like to continue this discussion if you have a moment here. $\endgroup$ – JohnGalt May 21 at 15:32

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