The Federal Reserve has set limits upon how much in total a payments-system participant can owe to everyone else who belongs to the same clearing system.

Question

Quizplus · Accepted Answer

The Federal Reserve, through its Regulation J and the operating circulars governing the Fedwire Funds Service, sets limits on daylight overdrafts in the Federal Reserve accounts of financial institutions, effectively limiting how much a participant in the payments system can owe to others in the system at any given time during the day. These limits are part of the Federal Reserve's risk management framework to ensure the stability and efficiency of the payments system.

The Federal Reserve Has Set Limits Upon How Much in Total