> the transfer should just be a decrement of a number in the first bank and an increment of it in the account on the second bank The transfer actually decremen

> the transfer should just be a decrement of a number in the first bank and an increment of it in the account on the second bank The transfer actually decrements two numbers at the first bank and increments two numbers at the second bank, and typically also mutates two further numbers at another institution, as so: If you transfer your deposit from a bank, then that bank needs to decrement it's liability to you. If it's decrementing it's liabilities, it also needs to decrement it's assets by an equal amount (otherwise it'd be making a profit with this transaction, which it's clearly not). We therefore know from this that the first bank needs to transfer an asset of some kind from itself to the second bank. The second bank then needs to increment their liabilities to record the fact they now owe you money, and they need to increment their assets to record the fact that they now own this new asset they've just received. The asset that changes hands is typically Central Bank reserves, which is essentially money that is held in an account with the Federal Reserve. In order for the money to change hands, the Federal Reserve has to decrement the amount of reserves that are owned by/sit in the account of the first bank, and increment the amount of reservers that are owned by the second bank. The other effect you need to think about is what happens if the first bank doesn't have a sufficiency of reserves to settle for this transaction? In this case, the sending bank would need to sell some of it's other assets so that it receives reserves from other institutions, before sending those reserves to the second bank, or alternatively it can go to the Federal Reserve and ask the Fed to create new reserves and lend those reserves to the bank, securing the loan against eligible collateral (such as US treasuries, as in the new Bank Term Funding Program), which it agrees to repay later (either with reserves that it receives in the future from other inbound transfers, or by ultimately selling the assets).