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Journal Article
SIC: Switzerland's new electronic interbank payment system
It is an article of faith among American bankers and their regulators that some daylight overdrafts are necessary to the efficient functioning of large-dollar wire transfer systems. But the Swiss have injected an element of doubt by developing a system that does away with daylight overdrafts. Their new system processes a payment only if sufficient clearing funds are on deposit in the sending banks reserve account. If sufficient funds are not available, the payment is held in a queue until covering funds have arrived. Vital and Mengle describe the first eighteen months of the systems operation.
Journal Article
Large-dollar payment flows from New York
Journal Article
Intraday credit: risk, value, and pricing
An abstract for this article is not available
Journal Article
New rules aim to clarify overdraft information
New amendments to Regulation DD address how banks inform their customers about bounced-check protection services.
Report
Price-increasing competition: the curious case of overdraft versus deferred deposit credit
We find that banks charge more for overdraft credit when depositors have access to a potential substitute: deferred deposit ("payday") credit. We attribute this rise in prices partly to adverse selection created by banks' practice of charging a flat fee regardless of the overdraft amount--pricing that favors depositors prone to large overdrafts. When deferred deposit credit priced per dollar borrowed is available, depositors prone to small overdrafts switch to that option. That selection works against banks; large overdrafts cost more to supply and, if depositors default, banks lose more, ...
Working Paper
Pricing daylight overdrafts
An examination of three policy problems associated with daylight credit and an evaluation of three reform proposals to alleviate the payment system risk associated with Federal Reserve Banks' extension of daylight credit to financial institutions.
Working Paper
Recurrent overdrafts: a deliberate decision by some prepaid cardholders?
Overdrafts have been an ongoing concern of policymakers, and they are one of the main issues being considered for prepaid card rules that the Consumer Financial Protection Bureau (CFPB) is currently drafting. Despite regulatory interventions and heated debate between proponents and opponents of further intervention, little research has been conducted to understand the overdraft behavior of prepaid cardholders. This paper attempts to fill that gap by analyzing a large micro-level dataset of general purpose reloadable (GPR) prepaid cardholders. We find that a small percentage of GPR prepaid ...