Two methods of federal funds transfer are commonly USED. To execute the first type of transfer, the lending institution authorizes the DISTRICT Reserve Bank to debit its reserve account and to credit the reserve account of the borrowing institution. Fedwire, the Federal Reserve System's wire transfer network, is employed to complete a transfer.

The second method SIMPLY INVOLVES reclassifying respondent bank demand deposits at correspondent banks as federal funds borrowed. Here, the entire transaction takes place on the BOOKS of the correspondent.

Two methods of federal funds transfer are commonly used. To execute the first type of transfer, the lending institution authorizes the district Reserve Bank to debit its reserve account and to credit the reserve account of the borrowing institution. Fedwire, the Federal Reserve System's wire transfer network, is employed to complete a transfer.

The second method simply involves reclassifying respondent bank demand deposits at correspondent banks as federal funds borrowed. Here, the entire transaction takes place on the books of the correspondent.