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business deals of its customers that were not completed because it
was unable to transfer funds.
In response to the Federal Reserve's enforcement of the 5 p.m.
rule, NTS examined the timeliness of the MoneyNet system in terms
of logging and processing the wire transfers. To protect itself in
the event the system crashed, NTS developed a contingency site22
(also known as a disaster site or hot site) in which all logs of
wire transfers were copied or mirrored from the production site to
a second site in real time. Thus, if the production system failed,
the users could simply move over to the contingency site and
complete the transfers on that system. At the same time, NTS
needed to quickly recover the production system from the point at
which it crashed so that the users could continue logging transfers
for its customers.
The second major Federal Reserve regulatory change affecting
Norwest was the so-called daylight overdraft rule. Often, because
of the large number of transfers to and from wire institutions,
many of which were not settled until the end of each business day,
some institutions maintained negative balances in their Federal
Reserve accounts during some part of the day, which placed a risk
22 The wire transfer system's lack of a contingency site
resulted in Norwest's being cited by the Office of the
Comptroller of the Currency and Norwest's internal auditors
because of the potential for large losses.
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