Fed makes changes to payments system risk policy

The Federal Reserve today adopted changes to its payments system risk policy that would expand access to collateralized intraday credit from the Federal Reserve Banks. The changes—which are being adopted largely as proposed—are aimed at improving intraday liquidity management and payment flows while assisting the reserve banks in managing intraday credit risk.

Among other things, the Fed clarified the terms for accessing uncollateralized intraday credit and the circumstances under which an institution may remain eligible for uncollateralized capacity if its holding company or affiliate is assigned a low supervisory rating. The changes also better align the Fed’s payments system risk and overnight overdraft policies with the deployment of FedNow, the Fed’s real-time payments network.

The changes related to the FedNow service will become effective when FRBs begin processing live transactions for FedNow, which is expected to occur in 2023, with all other changes announced today will be effective 60 days after publication in the Federal Register.