overdrafts” on Fedwire and the risk of systemic failure due to the failure of a participant on one of the private EFT networks …, and then discusses several alternative risk reduction measures. Mengle argues that, on Fedwire, pricing of daylight … overdrafts would create incentives for banks to reduce such overdrafts and would serve to lower the risk now assumed by the …

settlement relative to the precrisis period. The decrease in daylight overdrafts reduced credit risk for the Federal Reserve and …. Interestingly, both improvements were the focus of the revisions to the Federal Reserve’s Payment System Risk policy, adopted in …

Previous comparative analyses of gross and net settlement have focused on the credit risk of the central counterparty … in net settlement arrangements and on the incentives for participants to alter the risk of the portfolio under net …