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september 20 - side as a deffered availability account and...

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Karina Santana September 20, 2011 The payment system 1. Check collection process a. 1/3 “on us” items- a check drawn on the bank. For example: two people from the same bank write a check to one another b. 2/3 “ transit items” b.i. Local clearing houses: local banks come to one location to clear each other checks b.ii. Correspondent bank: big brother bank b.iii. Federal reserve: inter regional check EX: 3 bank clearing house A B C CLEARING A 3,000 4,000 7,000 B 6,000 2,000 8,000 C 3,000 8,000 11,000 OWE 9,000 11,000 6,000 26,000 BANK A: 9,000-7,000=-2,000 BANK B: 11,000-8,000=-3,000 BANK C: 8,000-11,000=5,000 EX: BIG BROTHER BANK FEDNY keeps an account on the liability said of the ledger for each bank such as brooklyn bank and queens bank and on the liability side if there is a check written out it notes in on the liability
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Unformatted text preview: side as a deffered availability account and on the asset side it notes it as a cash iteam in process of collection. Usually there is a deffered available time schecule which is rated by the time that it might take for a banks check to chear. 0+same day 1= next day 2= day after next Federal reserve float; extra reserves WHY DOES FLOAT OCCUR? 1. Transportation delays 2. Holdover 3. Rejected items ***checks availability 1987 law: $ 100 can be access immediately upon deposit $2,500 checks or less local items 2 days Non local items 5 days *** checks are scan through MICR which stands for magnetic ink credit symbol...
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