AEA Papers and Proceedings
ISSN 2574-0768 (Print) | ISSN 2574-0776 (Online)
Payment Risk and Bank Liquidity Management
AEA Papers and Proceedings
(pp. 433–438)
Abstract
Banks are central to payment systems. As the rest of the economy transacts using deposits, liquidity is churned among banks. Using transaction-level data from Fedwire, we measure US banks' liquidity risk induced by depositors' payments. Despite the large buildup of liquidity buffers after the global financial crisis, banks' liquidity management has become increasingly sensitive to payment liquidity risk.Citation
Li, Ye, and Yi Li. 2026. "Payment Risk and Bank Liquidity Management." AEA Papers and Proceedings 116: 433–438. DOI: 10.1257/pandp.20261023Additional Materials
JEL Classification
- E42 Monetary Systems; Standards; Regimes; Government and the Monetary System; Payment Systems
- G01 Financial Crises
- G21 Banks; Depository Institutions; Micro Finance Institutions; Mortgages
- G28 Financial Institutions and Services: Government Policy and Regulation