Report
Quantifying the benefits of a liquidity-saving mechanism
Abstract: This paper attempts to quantify the benefits associated with operating a liquidity-saving mechanism (LSM) in Fedwire, the large-value payment system of the Federal Reserve. Calibrating the model of Martin and McAndrews (2008), we find that potential gains are large compared to the likely cost of implementing an LSM, on the order of hundreds of thousands of dollars per day.
Keywords: Payment systems; Fedwire; Liquidity (Economics); Federal Reserve System;
Access Documents
File(s): File format is text/html https://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr447.html
File(s): File format is application/pdf https://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr447.pdf
Bibliographic Information
Provider: Federal Reserve Bank of New York
Part of Series: Staff Reports
Publication Date: 2010
Number: 447