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Clearing, settlement, and monetary policy

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  • Jeffrey M. Lacker

Abstract

This paper develops a general equilibrium model of the clearing and settlement of private payment instruments. Spatial separation, heterogeneous preference shocks and limited communication provide a role for private credit as a means of payment. Although this method could be applied to various settlement arrangements, the use of central bank deposit liabilities in settlement is studied here. Various tools of payment system policy, such as intraday overdraft limits and fees, collateral requirements, reserve requirements, and interest on reserves, are examined.

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  • Jeffrey M. Lacker, 1997. "Clearing, settlement, and monetary policy," Working Paper 97-01, Federal Reserve Bank of Richmond.
    • Handle: RePEc:fip:fedrwp:97-01
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    Keywords

    Clearinghouses (Banking); Monetary policy;

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