An examination of the concept of settlement risk, a description of the large-dollar payment system in the U.S., and an explanation of the increased concern about settlement risk.

A description of sources of risk in large-dollar transfer systems and a discussion of the Board of Governors' new mechanism for risk control. The author cites examples of potential changes that might facilitate future risk reduction.

A search for a contemporary rationale for reserve requirements that finds little to recommend them other than an aversion to total reliance on the discount window for meeting banks' day-to-day liquidity needs.

A comparison of Federal Reserve overdraft and reserve requirement rules with those of the Deutsche Bundesbank, the Bank of Japan, and the Bank of England, finding that no unique set of rules is necessary for effective performance of a central bank's monetary and payments system functions.

An examination of the fading significance of the Federal Reserve System's reserve requirements and the recent flowering of required clearing balances, a rapidly growing feature of Reserve Bank operations.

An examination of the federal deficit and of the possible effects of persistently high levels of federal debt on real interest rates, private investment, and the economy's real growth.

A proposal of two suggested changes in the current sealed-bid, multiple-price auction process for selling U.S. Treasury securities, each of which might eliminate incentives and opportunities for market manipulation and thereby reduce the need to police arbitrary auction rules.

An examination of how much Federal Reserve Banks should charge for daylight overdrafts. A low fee involves questions of moral hazard in central banking, while a high fee raises questions about risk myopia in private credit markets.

An examination of the indicator value of the yield curve, concluding that its message is no more distinct than those received from other intermediate indicators.

A discussion of investor risk in the government securities market, covering abuses and the key features of possible remedies being offered by proposed regulations required by the Government Securities Act of 1986.