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The timing and funding of CHAPS sterling payments

Becher, Christopher; Galbiati, Marco; Tudela, Merxe - In: Economic Policy Review (2008) Sep, pp. 113-133

Real-time gross settlement (RTGS) systems such as CHAPS Sterling require large amounts of liquidity to support payment … activity. To meet their liquidity needs, RTGS participants borrow from the central bank or rely on incoming payments from other …

Persistent link: https://www.econbiz.de/10005372875

Intraday liquidity management: a tale of games banks play

Bech, Morten L. - In: Economic Policy Review (2008) Sep, pp. 7-23

, have implemented real-time gross settlement (RTGS) systems. Although RTGS systems can significantly reduce settlement risk …. This article uses a game-theoretical framework to analyze the intraday liquidity management behavior of banks in an RTGS …

Persistent link: https://www.econbiz.de/10005372889

An economic analysis of liquidity-saving mechanisms

Martin, Antoine; McAndrews, James - In: Economic Policy Review (2008) Sep, pp. 25-39

-saving mechanisms (LSMs), tools used in conjunction with real-time gross settlement (RTGS) systems. LSMs give system participants, such … as banks, an option not offered by RTGS alone: they can queue their outgoing payments. Queued payments are released if … as well as quicken settlement. This article analyzes the performance of RTGS systems with and without the addition of an …

Persistent link: https://www.econbiz.de/10005372902

An economic perspective on the enforcement of credit arrangements: the case of daylight overdrafts in Fedwire

Martin, Antoine; Mills, David C. - In: Economic Policy Review (2008) Sep, pp. 161-168

A fundamental concern for any lender is credit risk - the risk that a borrower will fail to fully repay a loan as expected. Thus, lenders want credit arrangements that are designed to compensate them for - and help them effectively manage - this type of risk. In certain situations, central banks...

Persistent link: https://www.econbiz.de/10005372923

Changes in the timing distribution of Fedwire funds transfers

Armantier, Olivier; Arnold, Jeffrey; McAndrews, James - In: Economic Policy Review (2008) Sep, pp. 83-112

The Federal Reserve's Fedwire funds transfer service - the biggest large-value payments system in the United States - has long displayed a peak of activity in the late afternoon. Theory suggests that the concentration of late-afternoon Fedwire activity reflects coordination among participating...

Persistent link: https://www.econbiz.de/10005372931

Global trends in large-value payments

Bech, Morten L.; Preisig, Christine; Soramäki, Kimmo - In: Economic Policy Review (2008) Sep, pp. 59-81

Globalization and technological innovation are two major forces affecting the financial system and its infrastructure. Perhaps nowhere are these trends more apparent than in the internationalization and automation of payments. While the effects of globalization and technological innovation are...

Persistent link: https://www.econbiz.de/10005372999

Banks' payments-driven revenues

Radecki, Lawrence J. - In: Economic Policy Review (1999) Jul, pp. 53-70

Although many people believe that the payments area is a fairly minor business function within the banking sector, an increasing share of banks' revenue comes from fee services. To understand the full scope of the payments area, the author develops a broad definition of this business line and...

Persistent link: https://www.econbiz.de/10005373001

Understanding risk management in emerging retail payments

Braun, Michele; McAndrews, James; Roberds, William; … - In: Economic Policy Review (2008) Sep, pp. 137-159

New technologies used in payment methods can reduce risk, but they can also lead to new risks. Emerging retail payments are prone to operational and fraud risks, especially security breaches and potential use in illicit transactions. This article describes an economic framework for understanding...

Persistent link: https://www.econbiz.de/10004993856

Economizing on liquidity with deferred settlement mechanisms

Johnson, Kurt; McAndrews, James J.; Soramaki, Kimmo - In: Economic Policy Review (2004) Dec, pp. 51-72

Credit extensions to banks using the Fedwire Funds Service-the Federal Reserve's real-time gross settlement (RTGS … mechanisms that complement RTGS systems: one-hour netting, six-hour netting, and a mechanism called a receipt-reactive gross … settlement (RRGS) system. Their results suggest that in conjunction with RTGS systems, the RRGS mechanism could significantly …

Persistent link: https://www.econbiz.de/10005712969

The timing and funding of Fedwire funds transfers

McAndrews, James; Rajan, Samira - In: Economic Policy Review (2000) Jul, pp. 17-32

An examination of the Federal Reserve’s Fedwire Funds Transfer service reveals that the highest concentration of funds-transfer value occurs in the late afternoon. The authors attribute this activity peak to attempts by banks (and their customers) to coordinate payment timing more closely. By...

Persistent link: https://www.econbiz.de/10005713005