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In 2009, Philadelphia's total volume of commercial checks processed decreased 67 percent, and the dollar value of transactions decreased 73 percent. These decreases were the result of the general decline in check processing in the nation's payment system due to the increased use of Check 21 image exchange by financial institutions. As of December 11, 2009, Philadelphia's paper check operation was consolidated into the Cleveland check operation. This marked the completion of over 90 years of paper check processing by Philadelphia within the Federal Reserve System. Philadelphia has now made the transition to a substitute check print and distribution site for 2010.
The volume of commercial checks received as Check 21 electronic images increased 5 percent in 2009. The total paper and electronic items processed declined nationwide due to continued declines in check writing. At this stage, increases in electronic volume are the result of more institutions, particularly credit unions and smaller community banks, using Check 21 image exchange rather than depositing paper checks. However, the overall Check 21 dollars processed in 2009 declined 12 percent because some large correspondent institutions with large dollar value transactions exchanged images directly with other correspondents via clearinghouse arrangements.
In August 2008, all government check volume was consolidated at the St. Louis Reserve Bank. As a result, Philadelphia did not have any government check volume to report in 2009.
In 2009, Philadelphia continued to be a major processor of cash in the Federal Reserve System, although the volume of currency processed decreased 5 percent because of improvements in financial institutions' cash-handling practices. Because the Bank processed a greater proportion of smaller denomination notes, the actual dollar value of currency processed decreased by a more significant margin (18 percent). In 2009, the volume of coin bags processed on site increased 13 percent, and the value of processed coin increased 15 percent because of an overabundance of coin in the District resulting from the 11th year of the State Quarters program, during which the U.S. Territories were added to the program, and the issuance of new commemorative coins.
In 2009, discount window lending increased significantly, both in the number of loans and the value of loans advanced by the Reserve Bank. The financial turbulence and the tightening of liquidity in the economy resulted in many depository institutions relying on the discount window as a source of funds to meet their liquidity needs. In addition to the normal lending programs (i.e., primary credit), financial institutions also took advantage of the new lending programs introduced by the Federal Reserve, such as the Term Auction Facility (TAF).
SERVICES TO DEPOSITORY INSTITUTIONS
|2009 Volume||2009 Dollar Value||2008 Volume||2008 Dollar Value|
Commercial checks -
|182.1 million checks||$300.0 billion||554.8 million checks||$1,094.3 billion|
Check 21 received
|1.2 billion checks||$2,198.0 billion||1.2 billion checks||$2,509.1 billion|
U.S. government checks
|-||-||40.9 million checks||$47.7 billion|
|1,702.7 million notes||$23.7 billion||1,793.2 million notes||$29.0 billion|
Coin paid and received
|459.0 thousand bags||$215.1 million||404.9 thousand bags||$187.5 million|
|Loans to depository institutions|
during the year
|1,295 loans||$7,369.0 billion||437 loans||$2,264.8 billion|