What are the Federal Reserves roles in the payment system?
In summary, the role of the Federal Reserve in providing payment services is to promote the integrity and efficiency of the payments mechanism and to ensure the provision of payment services to all depository institutions on an equitable basis, and to do so in an atmosphere of competitive fairness. Given the size, speed, and interdependencies of payments, this mission is, and will likely continue to be, even more important than it was when the Federal Reserve was established in 1913. The Role of the Federal Reserve Background Since the Federal Reserve’s inception, its active involvement in payments processing has been an integral part of the development of the nation’s financial system. The Congress, responding in part to the breakdown of the check-collection system in the early 1900s, made the Federal Reserve an active participant in the payments system when it established the Federal Reserve in 1913. At that time the Congress envisioned that the Federal Reserve would play a dual role
