United States: Publication of Financial Sector Assessment Program Documentation: Technical Note on Selected Issues on Liquidity Risk Management in Fedwire Funds and Private Sector Payment

IMF Staff Country Reports, May 14, 2010

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Canonical URL: United States: Publication of Financial Sector Assessment Program Documentation: Technical Note on Selected Issues on Liquidity Risk Management in Fedwire Funds and Private Sector Payment

This paper discusses Selected Issues on Liquidity Risk Management in Fedwire Funds and Private Sector Payment for the United States.
Publication date: May 14, 2010.

An asymmetric treatment of foreign banking organizations exists regarding the calculation of the capital measure for caps and the fee deductible.
Policy provisions implemented in March 2009 substantially addressed this asymmetry.
Steps are needed to amend Fedwire’s settlement procedures for:
- tri-party repo transactions,
- Depository Trust Company,
- Clearing House Interbank Payments System,

to discourage late-in-the-day payments.

Amend Fedwire settlement procedures for tri-party repo transactions to reduce incentives for late-in-the-day payments.
Modify procedures at the Depository Trust Company to discourage late-in-the-day payments.
Adjust Clearing House Interbank Payments System operations to discourage late-in-the-day payments.
Continue monitoring and, where necessary, further adjust the treatment of foreign banking organizations to ensure the calculation of the capital measure for caps and the fee deductible remains symmetric.

Subject: Asset and liability management, Banking, Credit, Financial markets, Liquidity, Money, Payment systems
Keywords: card payment scheme, CHIPS balance, CHIPS business committee, CLS Bank, CR, Credit, daylight overdraft, Europe, ISCR, late-in-the-day payment, Liquidity, overdraft, parent Clearing House, Payment systems, payments service, value