As liquidity conditions in the term funding markets grew increasingly strained in late 2007, the Federal Reserve began making funds available directly to banks through a new tool, the Term Auction Facility (TAF). The TAF provides term funding on a collateralized basis, at interest rates and...

In this paper, we consider the costs and benefits of transactions privacy. In the environment we consider, privacy is the concealment of potentially useful information, but concealment also potentially bestows benefits. In some versions of the environment, the standard Coasian logic applies:...

[...]This article outlines a different approach to the study ofLSMs in a payments system. It examines a theoretical modelof the behavior of parties, which for simplicity we refer to asbanks. Each bank has particular motivations and constraints;as a result, its behavior can be determined as an...

Monetary policy has traditionally been viewed as theprocess by which a central bank uses its influence overthe supply of money to promote its economic objectives. Forexample, Milton Friedman (1959, p. 24) defined the tools ofmonetary policy to be those “powers that enable the [FederalReserve]...

[...]We observe several trends in payment timing from 1998 to2006. After 2000, the peak in payment activity shifts to laterin the day. Indeed, post-2000, a greater concentration ofpayments occurs after 17:00. At the same time, however, severalfactors have been associated with increased payment...

[...]This article explores in several ways the structure andvocabulary of emerging payments system risks and theirmitigation. We begin by recounting several incidents of fraudand losses associated with emerging payment methods. Wethen describe an economic framework for understanding riskcontrol...

[...]In this article, we measure banks’ alternative fundingsources for Fedwire funds transfers throughout the day, usinga data set that includes all banks’ Fedwire funds transfers andFederal Reserve System deposits. This approach allows us togauge the importance of incoming payments as a...