The Federal Reserve System (FRBS) offers several cash services to its members. These cash services are targeted at reducing the cost of operations and enhancing liquidity. The Federal Reserve System (FRBS) provides these services through the Discount Rate Traders (DRTs) system. These cash services are also offered to financial institutions as well as individual traders.
The Federal Reserve Bank’s (FRB) International Cash Services (ICFS, ) is a system of interbank trading currencies that includes the buying and selling of financial instruments on foreign exchange markets. The Discount Rate Traders (DRTs, ) the most widely used trading system in the world by foreign currency traders, use the ICS Currency Marketplace Model. This system determines the rate of exchange (ROC) against selected currencies based on current market data. The ICFS uses the price of selected currencies to make decisions on trades between the forex trading centers. The foreign currency markets are highly volatile, and ICFS is designed to provide timely responses to changing market conditions and make efficient use of the volatility by allowing the member banks to obtain appropriate margins for the trades they place.
Many foreign currency investors, including international real estate professionals and mortgage bankers, use the Foreign Currency Broker Service (FCBS, ) the only United States Department of Treasury agency authorized to provide foreign currency brokering financial services. The FCBS serves as a liaison between the foreign bank and the Treasury Department, which distributes United States securities in exchange for the foreign currency held by the foreign bank. Other wholesale banknote business service companies that use the services of FCDs are direct wholesale coin brokers and foreign exchange dealers. Wholesale dealers offer cash services from major financial services companies and individual traders, as well as from government-sponsored entities such as the Departments of Treasury and Homeland Security.Continue Reading