Comments at the 10th Anniversary of CLS, New York City.

Comments at the 10th Anniversary of CLS, New York City.

Banks supply payment services that underpin the smooth operation of the economy. To ensure an efficient payment system, it is important to maintain competition among payment service providers, but data available to gauge the degree of competition are quite limited. We propose and implement a...

The goal of this paper is to provide a framework to analyze the effectiveness of bank coalition formation in response to an external aggregate shock that may cause disruption to the payment mechanism and real economic activity. I show that the kind of insurance mechanism provided by a specific...

The use of electronic payment methods has increased rapidly over the last decade. Recent studies shed greater light on the forms these payments are taking — and why checks still serve a vital function for certain transactions.

Recent market developments have heightened concerns about the potential for systemic risk in the payments system. At the same time that markets are becoming more integrated and global in scope, they are becoming more segmented in the sense that there is a growing separation evolving between the...

Most people are familiar with retail payments systems such as checks and credit cards. Less familiar are wholesale payments systems, which consist of electronic networks used for sending large sums among banks. A feature common to all wholesale networks is that settlement is carried out by...

This paper considers the welfare effect of introducing a liquidity-saving mechanism (LSM) in a real-time gross settlement (RTGS) payment system. We study the planner's problem to get a better understanding of the economic role of an LSM and find that an LSM can achieve the planner's allocation...