“Money, when paid into a bank, ceases altogether to be the money of the principal; it is then the money of the banker, who is bound to return an equivalent by paying a similar sum to that deposited with him when he is asked for it.”
Mitigation: Ceilings on the amount of money that you accept and transfer without knowing that someone really has it.
During the day, federal govt guarantees finality of transaction. Sometimes there is a daylight overdraft, meaning that Bank A might not have enough to cover one transaction at minute of transaction, but is going to get an incoming transfer in 20 minutes that will cover it. At end of day, Bank A has to have enough money, but fed govt covers until end of day. By guaranteeing finality of any transfer going through Fedwire system, US absorbs credit risk that transferor in the end did not have the money. The govt does this bc its important to keep the money going.
US govt controls that risk by setting caps on the size of overdrafts that it will cover.
