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...

During the last several years, the banking community has become increasingly aware of the risks faced by participants on electronic funds transfer (EFT) networks. Of particular concern have been the volume and incidence of “daylight overdrafts” on Fedwire and the risk of systemic failure due...

The Internet is often referred to as the world’s largest mall. About half of all adults in the United States have made a purchase online. Worldwide, online shopping is considerably greater—and cybershopping is expected to continue to grow as more households become connected to the Internet...

An analysis of the potential effects of three recent proposals for pricing Federal Reserve daylight overdrafts, demonstrating that reducing the attendant moral hazard in daylight overdraft credit depends on how, rather than on how much, pricing affects overdrafts, and that this should be a...

An examination of the cost of providing check-processing services at 47 Federal Reserve offices between 1983:1Q and 1990:IVQ, demonstrating how the Fed's unit cost measures can be decomposed into separate effects related to differences in cost efficiency, output mix, input prices, and...

Payment finality is critical to decentralized exchange. By specifying how the transfer of one type of claim extinguishes another, the rules governing finality minimize opportunities for default along credit chains and allocate other risks. ; The authors provide a basic analysis of finality and...

The history of money is marked by innovations that have expanded the role of "inside money"-money created by the private sector. For instance, the past few years have seen the development of several types of on-line payment arrangements, some of which have been dubbed "on-line currencies." ;...

There is little agreement on even the rudimentary definitions of a financial crisis, the sequence of events constituting a crisis, or the causes of these events. This article investigates the various theories of financial panics and crises with particular emphasis on the links between credit and...