The Texas banking crisis and the payments system
The Federal Reserve System plays a crucial role in the payments system that is especially important during periods of financial turmoil. In this article, Robert Clair, Joanna Kolson, and Kenneth Robinson explain the process and the risks involved in clearing checks in the private sector. They compare these processes and risks with the essentially risk-free check-clearing service the Federal Reserve System offers. During banking crises, they hypothesize, banks will increase their check-clearing through the Federal Reserve to minimize their risk exposure. A model of Federal Reserve check-clearing volume is constructed and estimated. The empirical results show that during banking crises, Federal Reserve check- processing volume rises as banks seek safer methods of clearing checks. Consequently, Federal Reserve payment services are important tools in minimizing the disruptive effects of banking crises on the economy.
Volume (Year): (1995)
Issue (Month): Q I ()
|Contact details of provider:|| Web page: http://www.dallasfed.org/|
More information through EDIRC
|Order Information:|| Email: |
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Robert T. Clair & Joanna Kolson & Kenneth J. Robinson, 1994. "Risky business: clearing checks during banking crises," Southwest Economy, Federal Reserve Bank of Dallas, issue Oct, pages 5-6,8.
- Fuller, Wayne A. & Battese, George E., 1974. "Estimation of linear models with crossed-error structure," Journal of Econometrics, Elsevier, vol. 2(1), pages 67-78, May.
When requesting a correction, please mention this item's handle: RePEc:fip:fedder:y:1995:i:qi:p:13-21. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Amy Chapman)
If references are entirely missing, you can add them using this form.