Households and businesses in the U.S. prefer to use check payment over less costly, electronic means of payment. Earlier studies have focused on check float, i.e., the time lag between receipt and clearing, as a potential explanation for the continued popularity of checks. An underlying...

This paper provides a new theory for two-sided payment card markets by positing better microfoundations. Adopting payment cards by consumers and merchants requires a fixed cost, but yields lower marginal costs of making payments. Considering this together with the heterogeneity of consumer...

New technologies used in payment methods can reduce risk, but they can also lead to new risks. Emerging retail payments are prone to operational and fraud risks, especially security breaches and potential use in illicit transactions. This article describes an economic framework for understanding...

The buildup of reserves in the U.S. banking system during the financial crisis has fueled concerns that the Federal Reserve's policies may have failed to stimulate the flow of credit in the economy: Banks, it appears, are amassing funds rather than lending them out. However, a careful...

November 1998Standard Bank of South Africa's innovative E Bank program demonstrates how a commercial bank can use market information to bundle services needed by the urban poor - and valued by the poorer clients to justify a fee high enough to cover costs.Much of the research on financial...

Recent regulatory and technological changes have spurred the development of automated trading systems known as ECNs, or electronic communications networks. Proponents of the networks contend that ECNs can cut transaction costs, accelerate trade execution, and expand the price information...

E-finance is defined as quot;The provision of financial services and markets using electronic communication and computationquot;. In this paper we outline research issues related to e-finance that we believe set the stage for further work in this field. Three areas are focused on. These are the...

E-finance is defined as quot;The provision of financial services and markets using electronic communication and computationquot;. In this paper we outline research issues related to e-finance that we believe set the stage for further work in this field. Three areas are focused on. These are the...

This paper considers the welfare effects of introducing a liquidity-saving mechanism (LSM) in a real-time gross settlement (RTGS) payment system. We study the planner's problem to get a better understanding of the economic role of an LSM and find that an LSM can achieve the planner's allocation...

Liquidity hoarding by banks and extreme volatility of the fed funds rate have been widely seen as severely disrupting the interbank market and the broader financial system during the 2007-08 financial crisis. Using a dataset of intraday Federal Reserve bank account balances and Fedwire interbank...