Banks and Cheques

[asterisk (Geoff)]

Originally Posted by mdgodf

Overnight processing...day 1 debit your account and credit (money goes to) the Bank's Exchange Settlement Account at the Reserve Bank. Day 2 (overnight) Bank's ESA account is debited and funds credited to the recipient's account - assumes payee and recipient accounts are at different banks; no real time processing, that only happens within the same bank.

This does not negate my statement about funds being available for other uses. The money in the ESAs is "borrowed" overnight for short-term "investment" and the available supply of money in the ESFs is the means by which the Reserve Bank manipulates the level of interest rates in the economy.

My statement is that someone else besides me (the payer) and the recipient (the payee) has these funds for their own uses for the period of time claimed for clearance - not just my funds, but all funds from inter-bank transactions.

Cheers

[KG8]

Don't worry about it, when the global economic collapse hits us things like checks will be redundant anyway as all transactions will have to be done electronically. Soon after that cards will be replaced by implants, the perfect system, designed to stamp out crime and fight terrorism.

[mdgodf (Mark)]

Originally Posted by asterisk

This does not negate my statement about funds being available for other uses. The money in the ESAs is "borrowed" overnight for short-term "investment" and the available supply of money in the ESFs is the means by which the Reserve Bank manipulates the level of interest rates in the economy.

My statement is that someone else besides me (the payer) and the recipient (the payee) has these funds for their own uses for the period of time claimed for clearance - not just my funds, but all funds from inter-bank transactions.

Cheers

Indeed someone else allways has your money in the intervening period.

[mdgodf (Mark)]

If anyone's interested in how the Reserve Bank's market operations work in details click here: http://www.rba.gov.au/MarketOperatio...perations.html