This paper considers the welfare effects of introducing a liquidity-saving mechanism (LSM) in a real-time gross …

system. We consider an environment where banks are subjected to liquidity shocks. Banks must make the decision to send, queue …We study two designs for a liquidity-saving mechanism (LSM), a queuing arrangement used with an interbank settlement …, or delay their payments after observing a noisy signal of the shock. With a balance-reactive LSM, banks can set a balance …

liquidity-saving mechanism (queue). Participants in our model face a liquidity shock and different costs for delaying payments …. They trade off the cost of delaying a payment against the cost of borrowing liquidity from the central bank. The … to show that the design of a liquidity-saving mechanism has important implications for welfare, even in the absence of …

This paper attempts to quantify the benefits associated with operating a liquidity-saving mechanism (LSM) in Fedwire …

This paper studies banks' incentives for choosing the timing of their payment submissions in a collateral-based real …-time gross settlement payment system and the way in which these incentives change with the introduction of a liquidity …-saving mechanism (LSM). We show that an LSM allows banks to economize on collateral while also providing incentives to submit payments …

Before the era of large central bank balance sheets, banks relied on incoming payments to fund outgoing payments in … order to conserve scarce liquidity. Even in the era of large central bank balance sheets, rather than funding payments with … on liquidity constraints revealed by payment behavior, our results shed light on thresholds for the adequacy of reserve …

provided liquidity against a range of assets during 2008-09. Dealers with lower equity returns and greater leverage prior to … liquidity in explaining dealer behavior. The results suggest that both financial performance and balance sheet liquidity play a …

close to, or lower than, their desired level. Moreover, frictions in the interbank market may have prevented the efficient …

sensitive to the dynamics of the distribution of reserves across banks …