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The timing and funding of Fedwire funds transfers Author info | Abstract | Publisher info | Download info | Related research | Statistics James McAndrews
Samira Rajan
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An examination of the Federal Reserve’s Fedwire Funds Transfer service reveals that the highest concentration of funds-transfer value occurs in the late afternoon. The authors attribute this activity peak to attempts by banks (and their customers) to coordinate payment timing more closely. By synchronizing payments, banks can take advantage of incoming funds to make outgoing payments—especially during periods of heavy payment traffic. Conversely, during off-peak times, banks must rely more on account balances or overdrafts to fund payments, which increases the cost of making payments. For this reason, banks time their payments to coincide with an activity peak, thereby reinforcing the peak.
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Article provided by Federal Reserve Bank of New York in its journal Economic Policy Review .
Volume (Year): (2000)
Issue (Month): Jul ()
Pages: 17-32
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Handle: RePEc:fip:fednep:y:2000:i:jul:p:17-32:n:v.6no.2Contact details of provider: Postal: 33 Liberty Street, New York, NY 10045-0001 Email: Web page: http://www.newyorkfed.org/ More information through EDIRC
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For technical questions regarding this item, or to correct its listing, contact: (Diane Rosenberger).
Keywords: Fedwire ; Payment systems ; Other versions of this item:
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