Fedwire

Categories: Tech, Banking

A true-crime TV show detailing cases where the FBI forced informants to wear listening devices.

It's also the name of a financial settlement system run by the Federal Reserve.

The Fedwire system allows its member institutions (banks and other financial companies) to settle final U.S. dollar payments electronically. It provides a real-time gross settlement system...that's banker-speak for a method to transfer funds instantaneously.

The system is used by banks to send large amounts of money in time-critical situations. Need to send $20 million so that it arrives in the next 15 minutes? You can't stuff cash in a suitcase and have one of your cronies (who's possibly wired by the FBI) fly it to its destination. You need Fedwire.

Fedwire transfers are considered final and irrevocable once they are processed. So if you send that $20 million, don't bother asking Fedwire to get it back for you. For that, you might still need the crony.

Find other enlightening terms in Shmoop Finance Genius Bar(f)