<p>The exact details of payment systems vary from country-to-country. The payments systems handle the multitude of transactions.</p>

<p>But if we are willing to simplify away the complexity of payment processing, private banks do have an account at the central bank, and transfers between banks are effectively transfers between those accounts. The central bank is a bank, and this is exactly how banks will handle transfers between its own customers.</p>

<p>These balances are generically referred to as <em>settlement balances</em>, but in a country with reserve requirements (like the United States), these will be refered to as <em>bank reserves</em>. It is fairly easy to find discussions of bank reserve operations on the internet.</p>

CC BY-SA 4.0
2019-01-03T00:13:13.857Z
2019-01-03T00:13:13.857Z
Brian Romanchuk
<p>Banks are constantly transferring electronic dollars to each other. There must be an entity that tracks how many digital dollars each bank has.</p>

<p>Does the Federal Reserve have "accounts" for banks? In general, do national banks have accounts for banks that use their currency?</p>

<central-banking><federal-reserve><united-states>
Does the Federal Reserve have bank accounts for banks?
philn
# Does the Federal Reserve have bank accounts for banks?

(Asked by: username_0 on 2019-01-02)

Banks are constantly transferring electronic dollars to each other. There must be an entity that tracks how many digital dollars each bank has.

Does the Federal Reserve have "accounts" for banks? In general, do national banks have accounts for banks that use their currency?

**Tags:** central-banking, federal-reserve, united-states


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## 1 answers

### Answer by username_1 on 2019-01-03. Score: 2 | Accepted answer

The exact details of payment systems vary from country-to-country. The payments systems handle the multitude of transactions.

But if we are willing to simplify away the complexity of payment processing, private banks do have an account at the central bank, and transfers between banks are effectively transfers between those accounts. The central bank is a bank, and this is exactly how banks will handle transfers between its own customers.

These balances are generically referred to as *settlement balances*, but in a country with reserve requirements (like the United States), these will be refered to as *bank reserves*. It is fairly easy to find discussions of bank reserve operations on the internet.


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