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Turnover in Fedwire Funds Has Dropped Considerably since the Crisis, but It's Okay

Author

Listed:
  • Rod Garratt
  • Antoine Martin
  • James J. McAndrews

Abstract

The Fedwire Funds Service is a large-value payment system, operated by the Federal Reserve Bank of New York, that facilitates more than $3 trillion a day in payments. Turnover in Fedwire Funds, the value of payments made for every dollar of liquidity provided, has dropped nearly 75 percent since the crisis. Should we be concerned? In this post, we explain why turnover has dropped so much and argue that it is, in fact, a good thing.

Suggested Citation

  • Rod Garratt & Antoine Martin & James J. McAndrews, 2014. "Turnover in Fedwire Funds Has Dropped Considerably since the Crisis, but It's Okay," Liberty Street Economics 20140825, Federal Reserve Bank of New York.
    • Handle: RePEc:fip:fednls:86965
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    File URL: https://libertystreeteconomics.newyorkfed.org/2014/08/turnover-in-fedwire-funds-has-dropped-considerably-since-the-crisis-but-its-okay.html
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    Cited by:

    1. Rodney J. Garratt, 2022. "An Application of Shapley Value Cost Allocation to Liquidity Savings Mechanisms," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 54(6), pages 1875-1888, September.
    2. Eisenbach, Thomas M. & Kovner, Anna & Lee, Michael Junho, 2022. "Cyber risk and the U.S. financial system: A pre-mortem analysis," Journal of Financial Economics, Elsevier, vol. 145(3), pages 802-826.

    More about this item

    Keywords

    Fedwire Funds; Crisis; Liquidity Provision;
    All these keywords.

    JEL classification:

    • G2 - Financial Economics - - Financial Institutions and Services

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