By Paul Kiernan 

The Federal Reserve said Wednesday that an "operational error" disrupted services in several of its business lines, including the electronic settlement system used by banks, businesses and government agencies.

"A Federal Reserve operational error resulted in disruption of service in several business lines. We are restoring services and are communicating with all Federal Reserve Financial Services customers about the status of operations," said Jim Strader, a spokesman for the Fed's Richmond reserve bank, said in an emailed statement.

In addition to setting monetary policy, one of the Fed's lesser-known roles includes acting as a bank for the nation's banks, as well as for the U.S. Treasury Department. It provides services including collecting checks and electronically transferring funds, and by selling and redeeming Treasury bills.

The Fed sent an alert to such customers at 12:43 p.m. ET of "a possible issue or disruption to multiple services." In a subsequent alert, it said Fed staff became aware of "a disruption for all services" beginning around 11:15 a.m.

"We acknowledge that payment deadlines are impacted and will communicate remediation efforts to our customers when available," the alert said.

One of the services taken offline was the Fedwire Funds Service, which the Fed describes as "the premier electronic funds-transfer service that banks, businesses and government agencies rely on for mission-critical, same-day transactions." Entities use the service to send or receive payments, settle positions with other financial institutions and to submit tax payments, among other activities.

Write to Paul Kiernan at paul.kiernan@wsj.com

(END) Dow Jones Newswires

February 24, 2021 14:50 ET (19:50 GMT)