What Is the Federal Reserve Communications System For The Eighties?
The Federal Reserve Communications System For The Eighties (FRCS-80) was a communications network plan launched in 1981 by the Federal Reserve Bank to link their various offices across the U.S. and facilitate transfers of securities and electronic funds transfers.
Understanding the Federal Reserve Communications System For The Eighties (FRCS-80)
The Federal Reserve Communications System For The Eighties was an elaborate communications network plan designed to link the various U.S. offices of the Federal Reserve Bank and provide a means of initiating trades and electronic funds transfers.
Launched in 1981, FCRS-80 was designed to be a general-purpose data communications network for the Federal Reserve. It was intended to improve both the capacity and reliability of communications within the Federal Reserve, reduce the overall cost of communications, and increase the security of the data moving through the system.
An additional feature of FCRS-80 was to shift the system away from a computerized hub and to distribute and decentralize the computing power of the Federal Reserve communications system so that the system was not as vulnerable to downtime or other compromises.
To this end, FCRS-80 was guided by the Federal Reserve’s stringent internal requirements for providing information to the financial industry as well as other governmental agencies, including the U.S. Treasury.
A Brief History of FCRS-80
According to a 1981 statement by Federal Reserve Staff Director Theodore Allison, FRCS-80 was initiated as a natural progression of the business practices of the Federal Reserve.
The Fedwire system was originally launched in the early 20th century as a telegraphy-based primary communications network for the Federal Reserve and the U.S. Treasury. This system, according to Allison, sought periodic improvements as technology advanced. As the 1970s arrived and more efficient and secure electronic communications began to take shape, the Federal Reserve recognized the need to shift away from telegraphy into newer modes of communication.
Planning for FRCS-80 began in 1975, and development of the plan was driven by deadlines outside the control of the Federal Reserve. In the early 1970s, the Federal Reserve began to recognize the need for improvements to its Electronic Funds Transfer Services, as technological improvements such as packet switching became available, facilitating faster and more reliable electronic communications. Additionally, services which the Federal Reserve relied upon for their communications began to show signs of age, including an AT&T service which was slated for retirement in 1983.
Additionally, the passage of Depository Institutions Deregulation and the Monetary Control Act of 1980 provided the Federal Reserve greater powers over U.S. banks, adding additional urgency to the changes promised by FCRS-80.