Much of the literature treats the existence of non-par banking as a legal matter, emphasizing the Board of Governors’ legal struggle to force non-par banks to pay Reserve banks at par.
An examination of three policy problems associated with daylight credit and an evaluation of three reform proposals to alleviate the payment system risk associated with Federal Reserve Banks’ extension of daylight credit to financial institutions.
The reserve banks’ check collection service was designed in 1913 to serve as "glue", attaching the new central bank to the commercial and financial markets through member banks.
Computers and telecommunications devices may replace paper currency and checks—some day. Indeed, electronic methods of transferring money have become widely used.
The primary job of the modern central bank is to manufacture money. In January 1999, the new European Central Bank (ECB) began manufacturing a new money-the euro-by taking over the operations of 11 European nations’ monetary systems.
The significance of the Federal Reserve System’s reserve requirements has been fading for the last 50 years, moving toward more universal application at less onerous rates.
The U.S. Treasury expects to sell about a trillion dollars of new securities this fiscal year to finance a projected $400 billion budget deficit and to refinance maturing debt.
The federal funds rate was unusually volatile for several months starting in late December 1990. Day-to-day changes over this period were far greater than in previous years, although the difference seems to have disappeared recently (figure 1A).
Although technological change has permeated the payments industry of the United States, the dominant means of effecting payments has not changed appreciably since the turn of the century.