Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/146678
Authors: 
McAndrews, James Joseph
Kroeger, Alexander
Year of Publication: 
2016
Series/Report no.: 
Staff Report, Federal Reserve Bank of New York 779
Abstract: 
The policy measures taken since the financial crisis have greatly expanded the size of the Federal Reserve's balance sheet and have thus raised the level of aggregate bank reserves as well. Over the same period there has been a significant shift in the timing of payments made over the Federal Reserve's Fedwire Funds Service toward earlier settlement. This paper documents this timing change and presents regression results suggesting that the increase in overall reserve balances explains the vast majority of this development. The paper also discusses the benefits of high aggregate reserve balances for the robustness of the payment system and the potential implications for policy going forward.
Subjects: 
Fedwire
settlement liquidity
reserves
monetary policy implementation
JEL: 
G20
G21
G28
Document Type: 
Working Paper

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