How do inter-bank electronic money transfers work?

Factual Questions
21

[QUOTE=saladin9876]
…

Scenario B
A customer rocks up at a bank with a suitcase full of cash - 1 million dollars to be exact. The customer announces that he wants to deposit it in to his bank account, and the bank agrees. The bank credits the customer’s account with 1 million dollars and takes possession of the cash. A few weeks later, the customer decides to electronically transfer the million dollars to some other bank. He does this, and the bank deducts 1 million from his account.
Result: The bank is in pretty much the same position as it was before the customer deposited the million.. except.. it still has the 1 million in cash!

So.. when it comes time for the bank to purchase their bank notes from the Fed… that’s 1 million less they need to worry about spending. A saving of 1 million. A saving of the exact amount that the customer deposited in cash.

To put it another way - are you saying that giving 1 million in cash to a bank, and then wiring it out - results in a $1 million profit to the bank? (Because it’s one less million they now need to spend on notes)?
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(note emphasis)
This is the problem, here. A customer’s account doesn’t have any money in it, it’s just a record of how much money the bank owes the customer. It’s like if I loaned you 100 bucks. Then, I ask you to send a $100 check off to someone else (stupid gambling debts!). You still have the $100 bill in your pocket, but you aren’t $100 richer.

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[QUOTE=saladin9876]
Now that we have fiat money, and the transfer is “electronic”, how is it done, logistically speaking?
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[QUOTE=Antinor01]
If I remember, I’ll ask a friend tonight. She’s the VP of the electronic funds department for a bank. (Lot going on today, so I promise nothing)
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Neither of you are likely to get much in the way of a detailed, specific answer.

Both individual banks and the Fed prefer to answer only in general terms, for security reasons.

23

[QUOTE=friedo]
You’re forgetting that there’s no loss involved when the bank buys currency from the Fed. They electronically transfer $X to the Fed, they get $X worth of bills. This week, because they got the suitcase of dough, they transfer $X minus one million to the Fed, and get $X minus one million dollars of bills. No profit or loss occurs in either case.
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Yes, yes, this is what I wasn’t getting.

I was thinking the bank was incurring a loss by “buying” notes from the Fed. Of course, they are not.

Thank you to everyone who replied.