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A Study of Large-Dollar Payment Flows Through
CHIPS and Fedwire
HG1710
S86
1987
December 1987
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Federal Reserve Bank of St. Louis
December, 1987
A STUDY OF LARGE-DOLLAR PAYMENT FLOWS
THROUGH CHIPS AND FEDWIRE
The nation's two large-dollar electronic payments
systems--the New York Clearing House Interbank Payments System
(CHIPS) and the Federal Reserve wire transfer network (Fedwire)-together process electronic payments of funds in New York City
in amounts that now approach $1 trillion per day.
Yet, despite
the huge sums of money involved, very little quantitative
information has been available on the nature and co~position of
the payments going through these electronic networks.
,.
The purpose
of this study is to address that informational deficiency through
an analysis of a sample survey of one day's payments traffic
through the two networks.
This study is the product of a joint effort between the
Federal Reserve Bank of New York, nine large New York Clearing
House banks, and four foreign banks with New York City offices
that are active participants in CHIPS.
The nine Clearing House
banks, which participated in both the CHIPS and the Fedwire
survey, were The Bank of New York; Bankers Trust Company; The
Chase Manhattan Bank, N.A.; Chemical Bank; Citibank, N.A.; Irving
Trust Company; Manufacturers Hanover Trust Company; Marine Midland
Bank, N.A.; and the Morgan Guaranty Trust Company.
The four
foreign banks, which were asked to participate in the CHIPS survey
only, were The Bank of Tokyo; Barclays Bank PLC; Credit Lyonnais
and Dresdner Bank. The substantial....., Awin.~,tiah~ researching
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Federal Reserve Bank of St. Louis
of Son Francisco
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-2the nature and purpose of the transactions was done entirely by
these 13 commercial banking organizations.
The design of the
sampling procedure and the analysis that follows were performed by
the Federal Reserve Bank of New York.
The samples of payments that were given to the 13 participating banks to research were, of course, limited to payments
processed through those organizations.
For that reason, this is
entirely a study of payments that flow through New York City,
though of course such payments can and do have origins and destinations that are nationwide and worldwide.
In any event, the
prime purpose of the survey was to develop a better understanding
of the linkages between the funds transfer networks and the New
York and international financial markets, and the restricting of
the survey to banks located in New York City was consistent with
that purpose.
Approach, Structure and Quality of the Survey
Survey Approach
The approach taken in the survey was derived from a small
pilot test undertaken earlier with the cooperation of Manufacturers
Hanover Trust Company and Morgan Guaranty Trust Company.
As a
result of that test, the survey was restricted to payments messages
sent by the participating banks and to payments in the amount of
$1 million or more.
The pilot test had indicated that there were
no important differences between the nature and purpose of payments
sent and received, and that little additional information could be
gained by surveying from both perspectives.
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Federal Reserve Bank of St. Louis
Also,
limiting the
-3-
survey to messages sent by the participants made the task of
researching the underlying business transactions much simpler,
since survey participants needed in most cases only to contact
their own customers for necessary third-party information.
The
size limitation of $1 million or more was imposed because few
transactions of smaller size were found to be importantly related
to the functioning of the national and international financial
markets--the principal focus of the study.
Moreover, while
transactions of less than $1 million in size are fairly numerous
on both CHIPS and New York Fedwire, they account for only a very
minor percentage of the total value of transactions on either
wire, and the extra effort of researching a representative sample
of such transactions would not have produced commensurate
informational benefits.
The pilot test also served to refine the questionnaires
that were used to develop comprehensive information on wire
transfers payments.
The questionnaires were limited to six
"Schedules'' covering the f~llowing broad categories of
transactions:
A.
Dollar Transfer Related to Securities
Purchase/Redemption/Financing
B.
Bank Loan Transactions
C.
Federal Funds Transactions
n·.
Commercial and Miscellaneous Transactions
E.
Settlement Transactions
F.
Dollar Transfers Related to Foreign Exchange/Eurodollar
Placement.
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Federal Reserve Bank of St. Louis
-4Participants in the survey were asked to identify each transaction
in the sample by one of these six broad categories and then to
supply specific details about the nature and purpose of the transaction, contacting their customer as necessary to obtain the information.
Copies of the six survey Schedules are attached as an
Appendix.
Structure of the Sample
The survey samples were structured in such a way as to
provide a reasonably representative sample of all transactions of
$1 million or more in size, while assigning progressively greater
importance to the larger size transactions.
Thus, transactions
ranging in size from $1 million to $5 million were sampled in
relatively small percentages, those ranging from $5 million to
$30 million were sampled at higher percentages, and transactions
of $30 million or more were sampled 100 percent.
Because the size
distribution of payments on Fedwire and CHIPS differ rather substantially, some variation between the two in the sampling percentages below $30 million was necessary in order to keep the two
samples at manageable and comparable size.
Specifically, the two
samples were drawn according to the following percentages by
transactions size.
Table 1
Sampling Percentages by Payment Size Classification
CHIPS
Fedwire
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$30 Million & over
$1 - 5 Million
$5 - 30 Million
7 1/2%
20%
100%
40%
100%
15%
-5The samples were drawn from CHIPS and Fedwire payments
traffic occurring on Wednesday, June 4, 1986, which turned out
to be an essentially "normal" day on both wire transfer systems.
Total CHIPS transactions that day came to 119,279, with an aggregate value of $432,446 million.
Second District Fedwire payment
originations numbered 55,636, with a total dollar value of
$265,163 million.
CHIPS closed the day on schedule at 4:30 p.m.,
while all three Fedwire closings were each delayed 30 minutes,
due largely to a late (5:15 p.m) Fedwire securities close.
Thus,
Fedwire inter-district third-party close occurred at 5:30 p.m.,
intra-district third-party close was at 6:30 p.m., and final
Fedwire close took place at 7:00 p.m.
On the survey day, the 13 banks participating in the
CHIPS survey accounted for $204.9 billion of CHIPS payments of
$1 million or more, or 48 percent of all the $426.5 billion total
of all CHIPS payments of that size made that day.
The nine banks
participating in the Fedwire survey made $197,043 million of
Fedwire payments of $1 million or more, or 76 percent of the
$259,919 million total of all payments of that size outgoing
through New York Fedwire on the survey date.
The totals of all Fedwire payments made by the nine
banks participating in the Fedwire survey (the "population"
sampled), broken down by numbers and dollar amounts within each
of the sample payments size categories, were as follows:
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Federal Reserve Bank of St. Louis
-6-
Table 2
Fedwire Payments Sampled By Payments Size Classification
$1-5 Million
$5-30 Million
$30 Million
& over
Total
5,350
4,958
1,528
11,836
Amounts
$12,662
($ Millions)
$61,652
$122,729
$197,043
Numbers
And, the corresponding CHIPS payments totals on the survey date
for the 13 participants in the CHIPS survey were:
Table 3
CHIPS Payments Sampled By Payments Size Classification
$30 Million
$1-5 Million
$5-30 Million
&
over
Total
16,725
10,642
1,127
28,494
Amounts
$35,772
($ Millions)
$97,232
$71,852
$204,857
Numbers
Applying the sampling survey percentages shown in
Table 1 to each survey participant's wire transfer message
traffic yielded the following sample transactions totals and
distribution across the three payment size classifications.
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Federal Reserve Bank of St. Louis
-7Table 4
Sample Totals and Distribution
By Payment Size Classification
CHIPS
Fedwire
$30 Million & Over
$1-5 Million
$5-30 Million
Total
1,286
2,131
1,127
4,544
795
1,972
1,528
4,176
The CHIPS total sample of 4,544 messages was larger than that of
Fedwire.
However, the CHIPS sample included 516 messages drawn
from the traffic of the four foreign banks participating only in
the CHIPS survey.
Thus, the CHIPS sample of transactions for the
nine participating Clearing House Banks was slightly smaller in
message size than the Fedwire sample, which was limited to the
Clearing House bank participants only.
The value of payments encompassed by each of the samples
was quite large in the aggregate, amounting to $94,372 million in
the case of the CHIPS sample and $149,308 million for the Fedwire
sample.
The following table shows the distribution across each of
the three sampling brackets of these sample total dollar amounts.
Table 5
Sample Pavment Amounts in$ Millions
By Payment Size Classification
$1-5 Million
$5-30 Million
$30 Million & Over
Total
CHIPS
$2,753
$19,512
$ 72,107
$ 94,372
Fedwire
$1,900
$24,680
$122,729
$149,308
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Federal Reserve Bank of St. Louis
-8Quantity, Quality and Generality of the Survey Results
The overall response rate to the survey was 61.2 percent
for the CHIPS sample and 72.6 percent for the Fedwire sample.
The
numbers of responses and percentage of response rates within each
sampling bracket were as follows:
Table 6
Survey Response Rates by Payment Size Classification
i3o
Million
Million
Pct.
No.
is-3o
Million
No.
Pct.
CHIPS
796
61. 9%
1,320
61. 9%
663
58.8%
2,779
61. 2%
Fedwire
533
67.0%
1,341
72.4%
1,167
75.9%
3,041
72.6%
i1-s
&
____NQ___._
Over
Pct.
Total
Pct.
No ..
The somewhat lower response rates for the CHIPS survey was
expected due to the greater difficulty of obtaining information on
CHIPS customer payments.
Customers originating a CHIPS payment are
predominantly foreign-based and more hesitant about supplying
specific payment information.
Also, of course, a sizeable number of
CHIPS payments originate in countries where disclosure is restricted
by law or regulation.
In this regard, of the nine Clearing House
banks that participated in both the CHIPS and Fedwire surveys, seven
showed lower response rates on their CHIPS samples than their Fedwire
samples, and the other two had only slightly higher CHIPS response
rates.
Nonetheless, the response rates on both samples were very
high by any standard.
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Federal Reserve Bank of St. Louis
-9The total dollar value of transactions captured by the
survey results amounted to $55,652 million in the case of the CHIPS
survey, and to $111,708 million for the Fedwire survey.
These totals
were distributed among the three sample payment size brackets as
follows:
Table 7
Survey Payment Amounts in$ Millions By Payment Size Bracket
$1-5 Million
$5-30 Million
$30 Million & Over
Total
CHIPS
$1,675
$11,881
$42,096
$ 55,652
Fedwire
$1,278
$17,117
$93,314
$111,709
The large disparity between the total payment amounts
captured by the two surveys partly reflects the fact that the CHIPS
sample was of smaller size in dollar terms than the Fedwire survey to
begin with (see Table 5).
However, the lower CHIPS survey response
rates, particularly in the $30 million and over payment size category
(58.8 percent versus 75.9 percent for Fedwire), were also a
contributing factor.
Both the CHIPS a~d the Fedwire survey data are highly
representative of the actual size distribution of transactions
amounts included within their respective samples.
Applying the
survey data to predict the size distribution of transactions within
the samples yields estimates that in no case differ by as much as two
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Federal Reserve Bank of St. Louis
-10percent from the actual dollar amounts contained within any of the
three transactions size brackets of either sample.
Moreover, a
comparison of the response data against the samples using even finer
breakdowns of transactions size show a similar degree of correspondence.
This suggests that there is no significant bias in the survey
results with respect to the size of transactions reported on, and, by
implication, probably no significant bias as well in the broad types
of transactions captured by the responses.
With respect to the level of transactional detail supplied
by the survey participants, that also appears to have been quite
good.
Tables that are presented later show composite summaries of
each of the survey reporting schedules received back from both the
CHIPS survey and the Fedwire survey, and include lines labeled
"unspecified" which quantify the informational elements that were
missing from the reporting forms.
In general, these "unspecified"
lines account for a small percent of either transactions or dollar
amounts,
and even in those cases where the percentages run moderately
high, the missing information does not appear to be especially
material, given the corresponding large amount of specified
information.
The fact that the reporting forms were returned with such
a high degree of informational completeness tells nothing, of course,
about the accuracy of the information actually supplied.
However,
while the effort put into the survey did vary among the participating
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Federal Reserve Bank of St. Louis
-11banks, on balance it was quite thorough and should have produced
reasonably reliable information.
Beyond that, it simply is not
possible to confidently assess the quality of the information,
especially at the finer levels of detail called for in the reporting
schedules.
As to the generality of the survey results, the fact that
the survey was limited in the case of Fedwire to payments made by the
nine largest Clearing House banks, and in the case of CHIPS to those
same Clearing House banks plus four large, internationally prominent
foreign banks, may render the results somewhat atypical of either of
the two wire payments systems generally.
However, in the case of New
York Fedwire, which the nine sample banks dominated with 76 percent
of payments dollar volume, the survey results as a matter of
arithmetic cannot contain much sampling bias.
Moreover, while the
sample banks in the CHIPS survey accounted for less than half of the
dollar volume on CHIPS, there is little reason to expect that the
character of traffic of other CHIPS participants is systematically
different in important degree from that captured in the sample.
But,
in any event, because the sample did not encompass all institutions
participating on CHIPS and New York Fedwire, some question about the
broad generality of the results for either of the wire systems in
aggregate remains, and this is particularly true for the finer
transactional breakdowns.
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Federal Reserve Bank of St. Louis
-12The Nature and Purpose of CHIPS & Fedwire Payments
Table 8 on the next page breaks down the CHIPS and Fedwire
survey data by the broad survey transactions categories, showing for
each survey the number and dollar amount of transactions, and the percentages of the respective totals of each, attributable to each of
the various transactions categories.
{Also, because the CHIPS survey
uniquely included transactions of four foreign bank CHIPS participants, the survey data for those participants alone are shown separately in Table 9 for comparison, but will not hereafter be referred
to separately since their presence in the CHIPS survey does not
materially affect the nature or composition of the overall results.)
The most striking, though perhaps not surprising, feature
of Table 8 is the extent to which it demonstrates the substantial
independence of business purposes served by the two funds transfer
systems.
At the one extreme, CHIPS handled almost all foreign
exchange transactions, while at the other extreme Fedwire accounted
for virtually all transactions related to securities purchase/
redemption/financing and Federal funds purchases and sales.
Table 8 does, of course, indicate seemingly significant
overlap between the two wire systems in those transactions included
within the four categories labeled Bank Loan, Commercial and
Miscellaneous, Settlement, and Eurodollar Placements.
however, the overlap is more apparent than real.
Even here,
Within these broad
categories of transactions, there are substantial differences as to
the location of the customers involved and the nature and purpose of
the transactions, with CHIPS internationally specialized in both
respects and Fedwire domestically focused.
As one example, in the
second largest apparent area of overlap--settlement transactions--
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-13-
TABLE 8
TRANSACTIONS BY SURVEY CATEGORY BY WIRE SYSTEM
($ Amounts in Millions)
Fedwire
CHIPS
Schedule/
Transactions
Category
No. of
Transactions
%
Dollar
Amount
%
No. of
Transactions
%
Dollar
Amount
~
A. Securities
Purchase/
Redemption/
Financing
32
1.2
930
1. 7
990
32.6
27,717
24.
B. Bank Loan
44
1. 6
1,001
1.8
79
2.6
2,340
2.
C. Federal Funds
10
0.4
146
0.3
888
29.2
39,709
35.
D. Commercial
and Misc.
131
4.7
4,702
8.4
540
17.8
18,762
16.
E. Settlement
130
4.7
7,140
12.8
228
7.5
11,735
10.
F. Eurodollar
Placements
659
23.7
18,259
33.0
289
9.5
11,200
10.
F. Foreign
Exchange
1,773
63.8
23,476
42.0
27
0.9
245
0.
Totals
2,779
100.0
55,652
100.0
3,041
100.0
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Federal Reserve Bank of St. Louis
111,708 100.
-14-
TABLE 9
CHIPS TRANSACTIONS OF FOREIGN BANK PARTICIPANTS BY SURVEY CATEGORY
($ Amounts in Millions)
Schedule/
Transactions
Category
Number of
Transactions
%
Dollar
Amount
%
A. Securities
Purchase/
Redemption/
Financing
1
0.3
33
B. Bank Loan
1
0.3
2
D. Commercial
and Misc.
5
1.3
142
2.2
E. Settlement
6
1. 5
117
1.8
93
23.3
2,830
44.3
F. Foreign
Exchange
293
73.4
3,258
51.1
Totals
399
100.0
6,382
100.0
0.5
C. Federal Funds
F. Eurodollar
Placements
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Federal Reserve Bank of St. Louis
-15the CHIPS payments were dominated by adjustments to the
correspondent balances of foreign banks and to settlement of
Euroclear and Cedel positions.
Fedwire settlement transactions,
on the other hand, were dominated by adjustments to the
correspondent balances of domestic banks and the settlement of
end-of-day CHIPS positions on the books of the Federal Reserve
Bank of New York.
These sorts of differences between CHIPS and
Fedwire will be seen throughout the following analysis.
The preceding Table 8 gives, of course, only a rough
picture of the true division of labor between CHIPS and Fedwire.
The differences in the size and structure of the two samples in
relation to the respective overall CHIPS and Fedwire traffic of
the survey participants, together with the differing survey
response rates, makes a close comparison of the raw survey data
inappropriate.
To get a better picture, it is necessary to use
the individual survey statistics to estimate the characteristics
of the respective "populations" from which they were drawn.
To
accomplish that, the data shown in Table 8 were developed for each
of the three payment size classifications used in drawing the
samples, and the percentages so obtained were then multiplied
against the respective CHIPS and Fedwire population totals within
each of those three payment size classifications.
The results
were then added across the three payment size classifications to
get an estimate of the breakdown of the aggregate CHIPS and
Fedwire traffic from which the samples were drawn.
The outcome of
these estimation procedures is presented as Table 10.
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-16-
TABLE 10
ESTIMATED AGGREGATE TRANSACTIONS BY WIRE SYSTEM
($ Amounts in Millions)
CHIPS
Schedule/
Transactions
Category
No. of
Transactions
%
Fedwire
Dollar
Amount
%
No. of
Transactions
%
Dollar
Amount
%
A. Securities
Purchase/
Redemption/
Financing
274
1.0
2,842
1. 4
4,458
37.7
54,856
27.8
B. Bank Loan
399
1. 4
3,476
1. 7
272
2.3
3,956
2.0
C. Fed Funds
107
0.4
788
0.4
2,361
19.9
66,269
33.6
D. Commercial
and Misc.
1,295
4.5
12,793
6.2
2,690
22.7
33,593
17.0
E. Settlement
945
3.3
16,198
7.9
915
7.7
18,664
9.5
F. Eurodollar
Placements
4,800
16.8
56,255
27.5
966
8.2
18,848
9.6
F. Foreign
Exchange
20,674
72.6
112,505
54.9
173
1. 5
858
0.4
Totals
28,494
100.0
204,857
100.0
11,836
100.0
197,043
100.0
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Federal Reserve Bank of St. Louis
-17The principal differences between Table 8 and Table 10
center on the percentage composition of CHIPS payments traffic.
Foreign Exchange transactions take on a significantly greater
importance in both numbers and dollar amounts, because these
transactions tend to have a relatively low average dollar value
and thus received a relatively low weight in the graduated
percentage sampling procedure that was used for the survey.
For
the opposite reason, Eurodollar Placement and Settlement transactions both assume lower percentages in the CHIPS estimated
aggregate transactions data.
Foreign Exchange and Eurodollar
Placement transactions remain by far the dominant payment flows
on CHIPS, together accounting for close to an estimated 90 percent
of total transactions and for 82.4 percent of dollar value.
In
comparison to Fedwire, CHIPS also takes on a relatively greater
role in Eurodollar placement activity, accounting for 75 percent
of the total of such estimated aggregate payments by survey
participants on both CHIPS and Fedwire, up from 62 percent of the
total of Eurodollar Placements captured in the survey data.
The Survey Results in Detail
The remainder of this report presents for both the CHIPS
and Fedwire surveys composite summaries of the survey reporting
schedules that were returned by the survey participants, along
with data on the timing of the transactions within the day.
Also,
for Fedwire, data are presented on the destination of the payments
by Federal Reserve District.
The foreign bank participants are
included in the CHIPS data throughout.
Also, no attempt is made
to expand either the CHIPS or Fedwire data to estimate population
characteristics.
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Federal Reserve Bank of St. Louis
-18Schedule A: Securities Purchase/Redemption/Financing Transactions
Tables 11 and 12, overleaf, present the composite
summaries of the reporting forms (Schedule A) for this transactions category received back from the CHIPS and Fedwire surveys,
respectively.
The CHIPS survey results included only 32 trans-
actions in this category, totaling $930 million in value.
By
contrast, the Fedwire survey results included 990 transactions
with an aggregate value of $27,717 million.
This category of
transactions was both the second smallest for the CHIPS survey and
the second highest for Fedwire, with Federal funds transactions in
each case making for these opposing second-place rankings (see
Table 8).
Transactions for Broker/Dealer and Investor Customer
accounts dominated both surveys about equally.
As to types of
instruments, forty percent of the dollar value of CHIPS transactions were in Eurobonds/potes, while, in contrast, transactions
on Fedwire were scattered rather broadly across the full array of
domestic instruments and included only a relatively small percentage of Eurodollar instruments.
Not surprisingly, commercial
paper transactions dominated the Fedwire survey results, reflecting
the fact that several of the participant banks in the survey are
major issuing and paying agents for issuers of commercial paper.
The 12.6 percent share of transactions involving "other" instruments reflected for the most part purchases of portfolios of whole
home mortgages from thrift institution by a Federal mortgage
agency, obviously for the purpose of securitization.
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Federal Reserve Bank of St. Louis
-19TABLE 11
CHIPS SECURITIES PURCHASE/REDEMPTION/FINANCING TRANSACTIONS
COMPOSITE SUMMARY
($ amounts in millions}
Number of
Transactions
Percent
Dollar Amount
Percent
Initiated By/For:
Own Investment Account
Own Trading Account
Own Other Account
2
6.25
148
15.94
Broker/Dealer
14
43.75
454
48.85
Investor Customer
14
43.75
278
29.89
2
6.25
50
5.32
Bankers Acceptance
1
3.13
5
0.49
Book-Entry Securities
--Fedwire
1
3.13
2
0.21
Domestic C/D
3
9.38
12
1. 32
Euro C/D
2
6.25
16
1. 73
Commercial Paper
6
18.75
162
17.46
Corporate Bond/Note
2
6.25
114
12.24
9
28.13
363
38.99
6
18.75
229
24.64
2
6.25
27
2.90
Security Issuer
Instrument:
Corporate Stock
Eurobond/Note
Mortgage-Backed Security
--Definitive
Municipal Security
Other
Misc. Pool of Loan
Collateral
Unspecified
********************************************************************
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Federal Reserve Bank of St. Louis
(Continued on Next Page)
-20-
TABLE 11
(Continued from previous page)
CHIPS SECURITIES PURCHASE/REDEMPTION/FINANCING TRANSACTIONS
COMPOSITE SUMMARY
($ amounts in millions)
Number of
Transactions
Percent
Dollar Amount
Percent
Nature of Transaction:
New Issue
9
28.13
258
27.70
16
50.00
588
63.24
Payment at Maturity
5
15.63
77
8.28
Unspecified
2
6.25
7
0.79
Secondary Market
********************************************************************
Purpose of Transaction:
Investment
4
12.50
103
11.03
12
37.50
428
46.07
Underwriting
2
6.25
70
7.52
Repurchase Agreement
2
6.25
35
3.76
Collateralized
Broker/Dealer Loan
2
6.25
100
10.75
Safekeeping
1
3.13
5
0.54
Other
2
6.25
123
13.26
Unspecified
7
21. 88
66
7.06
Trading
********************************************************************
********************************************************************
TOTALS
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Federal Reserve Bank of St. Louis
32
100.0
930
100.0
-21TABLE 12
FEDWIRE SECURITIES PURCHASE/REDEMPTION/FINANCING TRANSACTIONS
COMPOSITE SUMMARY
($ amounts in millions)
Number of
Transactions
Percent
Dollar Amount
Percent
Initiated By/For:
Own Investment Account
7
0.71
155
0.56
Own Trading Account
21
2.12
679
2.45
Own Other Account
34
3.43
1,011
3.65
Broker/Dealer
437
44.14
16,139
58.23
Investor Customer
359
36.26
6,615
23.87
Security Issuer
132
13.33
3,118
11. 25
********************************************************************
Instrument:
Bankers Acceptance
86
8.69
1,031
3.72
Book-Entry Securities
--Fedwire
62
6.26
3,788
13.66
Domestic C/D
79
7.98
2,321
8.38
Euro C/D
51
5.15
1,500
5.41
410
41. 41
10,366
37.40
33
3.33
1,090
3.93
Corporate Stock
3
0.30
23
0.08
Eurobond/Note
3
0.30
207
0.75
Mortgage-Backed Security
--Definitive
49
4.95
1,046
3.77
Municipal Security
46
4.65
413
1.49
Other
93
9.39
3,489
12.59
9
0.91
256
0.92
66
6.67
2,188
7.89
Commercial Paper
Corporate Bond/Note
Misc. Pool of Loan
Collateral
Unspecified
********************************************************************
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Federal Reserve Bank of St. Louis
(Continued· on Next Page)
-22-
TABLE 12
(Continued from previous page)
FEDWIRE SECURITIES PURCHASE/REDEMPTION/FINANCING TRANSACTIONS
COMPOSITE SUMMARY
($ amounts in millions)
Number of
Transactions
Percent
Dollar Amount
Percent
Nature of Transaction:
New Issue
285
28.79
7,429
26.80
Secondary Market
395
39.90
9,791
35.32
Payment at Maturity
244
24.65
7,373
26.60
66
6.67
3,124
11. 27
Investment
273
27.58
5,843
21. 08
Trading
235
23.74
6,347
22.90
11
1.11
501
1. 81
189
19.09
8,227
29.68
Collateralized
Broker/Dealer Loan
17
1. 72
906
3.27
Safekeeping
86
8.69
1,204
4.34
Other
64
6. 4 6
1,972
7.11
115
11. 62
2,718
9.81
Unspecified
Purpose of Transaction:
Underwriting
Repurchase Agreement
Unspecified
********************************************************************
********************************************************************
TOTALS
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Federal Reserve Bank of St. Louis
990
100.0
27,717
100.0
-23-
With respect to the Fedwire survey alone, the almost
precise equality between the dollar value of new issue transactions
and payments at maturity is a sensible result that is suggestive
of good quality of survey information.
The 30 percent figure for
the share of transactions value attributed to repurchase agreements
under the "Purpose of Transaction" heading seems a bit high, but
is consistent with both the sizeable shares of transactions value
attributed to Broker/Dealer customers and to Fedwire book-entry
securities.
Tables 13 and 14 on the next two pages show securities
related transactions by time of day for the CHIPS and Fedwire
surveys, respectively.
As expected, the payments cluster heavily
toward the end of the day on both wire transfer systems.
Almost
70 percent of the value of CHIPS securities-related transactions
occurred in the 2 1/2 hour period between 2:00 p.m. and the close
of CHIPS at 4:30 p.m.
The end-of-day clustering of activity was
equally compressed in time on Fedwire, with almost 60 percent of
the value of securities-related transactions occurring in the two
hours just prior to the normal 6:00 p.m. closing of Fedwire to
third-party intra-District traffic.
This heavy end-of-day
clustering on Fedwire was due almost entirely to payments flows
associated with new securities issuance.
Nearly 80 percent of the
day's total of $7.4 billion of payments attributed in the Fedwire
survey to new securities issues occurred within this two-hour
period, half of it involving commercial paper and the other half
spread broadly across eight other classes of instruments.
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Federal Reserve Bank of St. Louis
-24-
TABLE 13
CHIPS SECURITIES PURCHASE/REDEMPTION/FINANCING TRANSACTIONS
BY TIME OF DAY
($ amounts in millions)
Time
Number of
Transactions
Percent
Dollar
Amount
Percent
7:31 to 8:00
1
3.13
2
0.21
8:01 to 8:30
1
3.13
13
1.34
8:31 to 9:00
0
0.00
0
0.00
9:01 to 9:30
0
0.00
0
0.00
9:31 to 10:00
0
0.00
0
0.00
10:01 to 10:30
0
0.00
0
0.00
10:31 to 11:00
0
0.00
0
0.00
11:01 to 11:30
2
6.25
55
5.94
11:31 to 12:00
1
3.13
98
10.57
12:01 to 12:30
1
3.13
5
0.52
12:31 to 13:00
0
0.00
0
0.00
13:01 to 13:30
1
3.13
70
7.51
13:31 to 14:00
3
9.38
45
4.80
14:01 to 14:30
6
18.75
147
15.79
14:31 to 15:00
2
6.25
21
2.27
15:01 to 15:30
7
21. 88
214
23.05
15:31 to 16:00
4
12.50
140
15.09
16:01 to 16:30
3
9.38
120
12.91
32
100.00
930
100.00
Totals
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Federal Reserve Bank of St. Louis
-25TABLE 14
FEDWIRE SECURITIES PURCHASE/REDEMPTION/FINANCING TRANSACTIONS
BY TIME OF DAY
($ amounts in millions)
Time
Number of
Transactions
Percent
Dollar
Amount
Percent
8:31 to 9:00
3
0.30
115
0.41
9:01 to 9:30
0
0.00
0
0.00
15
1. 52
193
0.70
10:01 to 10:30
7
0.71
408
1.47
10:31 to 11:00
6
0.61
780
2.82
11:01 to 11:30
19
1. 92
335
1.21
11:31 to 12:00
7
0.71
761
2.74
12:01 to 12:30
26
2.63
453
1. 63
12:31 to 13:00
17
1. 72
567
2.05
13:01 to 13:30
29
2.93
1,898
6.85
13:31 to 14:00
58
5.86
1,398
5.05
14:01 to 14:30
70
7.07
1,581
5.70
14:31 to 15:00
87
8.79
2,050
7.40
15:01 to 15:30
8
0.81
198
0.71
15:31 to 16:00
20
2.02
362
1. 31
16:01 to 16:30
192
19.39
4,447
16.04
16:31 to 17:00
201
20.30
4,243
15.31
17:01 to 17:30
199
20.10
7,018
25.32
17:31 to 18:00
18
1. 82
638
2.30
18:01 to 18:30
8
0.81
271
0.98
990
100.00
27,717
100.00
9:31 to 10:00
-------------------------------------------------------------------
Totals
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Federal Reserve Bank of St. Louis
-26With respect to Fedwire, the payments flows related to
securities activities were heavily concentrated within the Second
Federal Reserve District (see Table 15 on the next page).
Seventy-
six percent of the value of securities-related payments went to
Second District counterparties, and 87 percent of that went from one
of the nine Clearing House bank survey participants to another.
The
distribution of securities-related payments among the other Federal
Reserve Districts is about as might have been expected, except for
the low percentage accounted for by the Boston District.
The
latter, however, reflects the fact that the larger Boston banks
either have offices in New York City that handle their securitiesrelated transactions or use New York correspondent banks for that
purpose.
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Federal Reserve Bank of St. Louis
-27-
TABLE 15
FEDWIRE SECURITIES PURCHASE/REDEMPTION/FINANCING TRANSACTIONS
DESTINATION BY FEDERAL RESERVE DISTRICT
($ amounts in millions)
Number of
Transactions
Percent
23
2.33
247.3
0.90
733
74.12
20,874.0
76.26
Philadelphia
17
1. 72
330.5
1.21
Cleveland
27
2.73
867.3
3.17
Richmond
14
1. 42
119.6
0.44
Atlanta
10
1.01
558.0
2.04
Chicago
71
7.18
1,099.1
4.02
5
0.51
32.0
0.12
Minneapolis
16
1. 62
384.1
1.40
Kansas City
14
1. 42
841. 0
3.07
Dallas
10
1.01
357.4
1. 31
San Francisco
49
4.95
1,661.4
6.07
Totals
989
100.00
27,371.6
100.00
1/Received by Survey
Participants.
638
64.51
18,203.9
66.51
District
Boston
New York 1./
St. Louis
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Federal Reserve Bank of St. Louis
Dollar Amount
Percent
-28B. Bank Loan Transactions
Tables 16 and 17 present for CHIPS and Fedwire,
respectively, the composite summaries of the survey responses
covering Bank Loan transactions.
As expected, these transactions
were small in frequency and value within both samples.
Many bank
loan transactions--disbursement of principal and repayments-probably occur directly across the books of lending banks, rather
than flowing through the wire transfer networks.
One exception to
that would be where a bank's customers are making repayments on
loans from third-party lenders, that is, where a bank's customer
instructs its bank to transfer funds to repay a loan at another
bank.
These payments are made either directly or through a lead
bank and probably explain the fact that payments of this nature
constitute the largest single category in both CHIPS and the Fedwire
survey.
In any event the small numbers and amounts of Bank Loans
transactions in both surveys, together with the fact that any one
day's activity of this type is apt to reflect unique influences,
makes broad generalizations about this survey category inappropriate.
Tables 18, and 19 show, respectively the intraday timing of
CHIPS and Fedwire Bank Loan transactions, and Table 20 presents the
destination of the Fedwire payments.
surprising.
Nothing in these data appears
The timing data show both CHIPS and Fedwire payments
fairly well distributed throughout the day.
The Fedwire destination
data do show a higher concentration of loan-related payments to the
Chicago and San Francisco Districts than is true of the other survey
transactions categories, but that could be nothing more than mere
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Federal Reserve Bank of St. Louis
-29-
happenstance, given the small number of loan transactions captured
in the survey and the timing factors that can impact any one day's
payments patterns for this classification of transactions.
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Federal Reserve Bank of St. Louis
-30-
TABLE 16
CHIPS BANK LOAN TRANSACTIONS
COMPOSITE DESCRIPTION
($ amounts in millions)
Nature of
Transaction
Disbursement of
Principal to Borrower
Number of
Transactions
Percent
13
29.55
141
14.09
7
15.91
112
11. 23
9.09
53
5.28
Dollar Amount
Percent
Purchase of Loan
Participation
Customer Drawdown
on Loan Facility
Customer Payment on
Third-Party Loan
Payment to Lead/Agent
Bank
Disbursement of Loan
Payments Received
20
45.45
694
69.39
Totals
44
100.00
1,001
100.00
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Federal Reserve Bank of St. Louis
-31-
TABLE 17
FEDWIRE BANK LOAN TRANSACTIONS
COMPOSITE DESCRIPTION
($ amounts in millions)
Nature of
Transaction
Number of
Transactions
Percent
20
25.32
503
21.51
1
1.27
8
0.32
Customer Drawdown
on Loan Facility
10
12.66
102
4.35
Customer Payment on
Third-Party Loan
25
31. 65
1,151
49.18
22
27.85
530
22.63
1
1. 27
47
2.00
79
100.00
2,340
100.00
Disbursement of
Principal to Borrower
Purchase of Loan
Participation
Dollar Amount
Percent
Payment to Lead/Agent
Bank
Disbursement of Loan
Payments Received
Not Categorized
Totals
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Federal Reserve Bank of St. Louis
-32-
TABLE_ 18
CHIPS BANK LOAN TRANSACTIONS
BY TIME OF DAY
($ amounts in millions}
Time
Number of
Transactions
Percent
Dollar
Amount
Percent
7:31 to 8:00
4
9.09
317
31.66
8:01 to 8:30
1
2.27
2
0.20
8:31 to 9:00
0
0.00
0
0.00
9:01 to 9:30
1
2.27
2
0.22
9:31 to 10:00
0
0.00
0
0.00
10:01 to 10:30
0
0.00
0
0.00
10:31 to 11:00
3
6.82
20
2.03
11:01 to 11:30
4
9.09
100
9.99
11:31 to 12:00
0
0.00
0
0.00
12:01 to 12:30
2
4.55
95
9.49
12:31 to 13:00
1
2.27
8
0.75
13:01 to 13:30
6
13.64
102
10.14
13:31 to 14:00
4
9.09
59
5.93
14:01 to 14:30
5
11.36
142
14.19
14:31 to 15:00
6
13.64
36
3.59
15:01 to 15:30
1
2.27
15
1.50
15:31 to 16:00
1
2.27
2
0.23
16:01 to 16:30
5
11.36
101
10.08
44
100.00
1,001
100.00
Totals
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Federal Reserve Bank of St. Louis
-33-
TABLE 19
FEDWIRE BANK LOAN TRANSACTIONS
BY TIME OF DAY
($ amounts in millions)
Time
Number of
Transactions
Percent
Dollar
Amount
Percent
9:01 to 9:30
2
2.53
55
2.35
9:31 to 10:00
0
0.00
0
0.00
10:01 to 10:30
2
2.53
71
3.04
10:31 to 11:00
3
3.80
150
6. 41
11:01 to 11:30
3
3.80
175
7.49
11:31 to 12:00
0
0.00
0
0.00
12:01 to 12:30
4
5.06
217
9.26
12:31 to 13:00
6
7.59
176
7.51
13:01 to 13:30
4
5.06
253
10.81
13:31 to 14:00
1
1. 27
10
0.43
14:01 to 14:30
10
12.66
197
8.42
14:31 to 15:00
6
7.59
182
7.76
15:01 to 15:30
0
0.00
0
0.00
15:31 to 16:00
0
0.00
0
0.00
16:01 to 16:30
16
20.25
344
14.68
16:31 to 17:00
11
13.92
316
13.51
17:01 to 17:30
9
11. 39
189
8.06
17:31 to 18:00
2
2.53
6
0.26
79
100.00
2,340
100.00
Totals
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Federal Reserve Bank of St. Louis
-34-
TABLE 20
FEDWIRE BANK LOAN TRANSACTIONS
DESTINATION BY FEDERAL RESERVE DISTRICT
($ amounts in millions)
District
Boston
Number of
Transactions
Percent
Dollar Amount
Percent
1
1. 27
1. 5
0.06
44
55.70
1,442.2
61. 63
Philadelphia
0
0.00
0.0
0.00
Cleveland
4
5.06
30.5
1. 30
Richmond
1
1.27
10.0
0.43
Atlanta
2
2.53
21.2
0.91
Chicago
16
20.25
431. 6
18.44
St. Louis
0
0.00
00.0
0.00
Minneapolis
1
1.27
40.0
1. 71
Kansas City
2
2.53
11. 7
0.50
Dallas
2
2.53
12.3
0.53
San Francisco
6
7.59
339.0
14.49
Totals
79
100.00
2,340.1
100.00
l/Received by Survey
Participants.
33
41. 77
1,171.5
50.06
New York l /
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Federal Reserve Bank of St. Louis
-35C. Federal Funds Transactions
The survey statistics for this class of transactions appear
consecutively as Tables 21 through 25, beginning at page 37.
CHIPS transactions in this category, shown in Table 21,
were de minimus in both numbers and value, as mentioned earlier.
All of the 10 reported CHIPS transactions were undertaken by Clearing
House banks for the accounts of their foreign bank customers, only
one of which maintains an account with the Federal Reserve Bank of
New York.
Moreover, the one small CHIPS transaction categorized as
term Federal funds appears in fact to have been a Eurodollar placement instead.
Thus, it seems that CHIPS serves as a mechanism for
effecting Federal funds transfers only in extremely limited
circumstances involving an inability to access Fedwire directly or
conveniently.
The Fedwire transactions in Federal funds described in
Table 22 reflect the fact that the nine Clearing House banks
participating in the Fedwire survey are all very active in the
Federal funds market as net borrowers.
This shows up in the result
that more than 60 percent of transactions by numbers and value are
identified as for the own accounts of the survey banks.
And, because
the survey was limited to payments sent by the survey banks, these
transactions for "own account" appear largely as "return" transactions.
Indeed, of the $25,559 million of transactions for the
own accounts of the survey participants, $21,091 million were
returns of funds borrowed and only $4,468 million (17.5 percent)
were sales.
The corresponding breakdown of the total of $14,150
million of transactions for customer accounts was $10,007 million in
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
-36Federal funds returns and $4,065 million in sales.
This latter
breakdown suggests that customer depository institutions of the nine
Clearing House banks are also fairly heavy net purchasers of Federal
funds in the aggregate as well.
Of the 15 Federal funds transactions on Fedwire identified
in Table 22 as "term'', only four actually provided the maturity,
which ranged from three to 309 days.
Thus, these data do not permit
any generalization about term Federal funds transactions beyond the
obvious conclusion that they are indeed rare.
However, it should be
noted that since this is a study of payments flows,
it understates
the amount of outstanding term Federal funds in direct proportion to
the average maturity of such term borrowing.
For example, if the
true average maturity of term Federal funds were ten business days,
only one-tenth on average would be paid-off or re-borrowed each
day.
For that reason, nothing in the Fedwire survey data shown in
Table 22 necessarily contiadicts the 1977 study by the Staff of the
Board of Governors that found about 7 1/4 percent of outstanding
1/
Federal funds borrowings to involve term contracts.-
By the same
token, the tiny percentage of transactions value attributed in this
survey to continuing Federal funds contracts cannot be said to be at
significant variance from the 4 percent figure the 1977 Staff study
cited for such amounts outstanding.
See "Repurchase Agreements and Federal Funds'', 64 Federal
Reserve Bulletin (May, 1978) p. 359.
1/
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Federal Reserve Bank of St. Louis
-37-
Tables 23 and 24 show the time-of-day profiles of Federal
funds transactions on Fedwire, broken down by sales of funds and
return of funds borrowed.
The corresponding data for CHIPS have
been omitted since it is entirely meaningless, given the
insignificance of Federal funds traffic on the CHIPS system.
The intraday profiles of Federal funds sales and returns on
Fedwire follow the classic pattern, with returns strongly concentrated in the first half of the day and sales bunched late in the
day.
This is particularly evident when the percent figures in
Tables 23 and 24 are summed to obtain the cumulative percentages of
dollar value sent by time of day.
Thus, as shown in Table 25, more
than three-fourths by value of all Federal funds returns had occurred
by 2:00 p.m., with over 50% of these returns occurring by 1:00 p.m.,
while little more than 5 percent of Federal funds sales
had been made by that same time.
Moreover, by 4:00 p.m. more than
80 percent of all Federal funds sales still remained to be effected,
suggesting that these sales (and purchase) transactions may largely
reflect adjustments to funds excesses and deficiencies that became
known only late in the day, rather than established ongoing lending
and borrowing relationships between regular counterparties.
Table 26 shows the destination of Fedwire Federal Funds
transactions by Federal Reserve District.
The broad, nationwide
distribution of the payments reflects the widely dispersed sources
from which the participant Clearing House bank purchase (and hence
repay) Federal funds.
Of particular note, however, is the heavy
flow of transactions to the Kansas City Federal Reserve District.
That flow largely reflects the presence in that District of the
United States Credit Union Central, which is an extremely large
seller of Federal Funds to several of the Clearing House banks.
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Federal Reserve Bank of St. Louis
-38-
TABLE 21
CHIPS FEDERAL FUNDS TRANSACTIONS
COMPOSITE DESCRIPTION
($ amounts in millions)
Number of
Transactions
Percent
Dollar Amount
Percent
Transaction for:
Own Account
Customer
10
100.00
146
100.00
Sale
6
60.00
131
89.76
Return
4
40.00
15
10.24
Nature of Transaction:
*****************************************************************
Original Maturity:
Overnight
9
90.00
141
96.56
l
10.00
5
3.44
Continuing Contract
Term
*****************************************************************
*****************************************************************
TOTALS
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Federal Reserve Bank of St. Louis
10
100.00
146
100.00
-39-
TABLE 22
FEDWIRE FEDERAL FUNDS TRANSACTIONS
COMPOSITE DESCRIPTION
($ amounts in millions)
Number of
Transactions
Percent
Dollar Amount
Percent
Transaction for:
Own Account
549
61. 82
25,559
64.37
Customer
38.18
14,150
339
35.63
*****************************************************************
Nature of Transaction:
Sale
172
19.37
8,533
21.49
Return
712
80.18
31,098
78.31
78
Unspecified
4
0.45
0.20
*****************************************************************
Original Maturity:
Overnight
851
Continuing Contract
Term
15
95.83
38,266
96.37
0.34
178
0.45
1. 69
741
1. 87
Unspecified
2.14
524
1. 32
19
*****************************************************************
*****************************************************************
TOTALS
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Federal Reserve Bank of St. Louis
888
100.00
39,709
100.00
-40TABLE 23
FEDWIRE SALE OF FEDERAL FUNDS TRANSACTIONS
BY TIME OF DAY
($ amounts in millions)
Time
Number of
Transactions
Dollar
Percent
Amount
Percent
8:31 to 9:00
1
0.58
82
0.96
9:01 to 9:30
0
0.00
0
0.00
9:31 to 10:00
2
1.16
17
0.20
10:01 to 10:30
0
0.00
0
0.00
10:31 to 11:00
0
0.00
0
0.00
11:01 to 11:30
2
1.16
26
0.30
11:31 to 12:00
0
0.00
0
0.00
12:01 to 12:30
2
1.16
29
0.34
12:31 to 13:00
5
2.91
44
0.52
13:01 to 13:30
5
2.91
67
0.78
13:31 to 14:00
4
2.33
195
2.29
14:01 to 14:30
10
5.81
373
4.37
14:31 to 15:00
13
7.56
396
4.64
15:01 to 15:30
0
0.00
0
0.00
15:31 to 16:00
4
2.33
320
3.75
16:01 to 16:30
43
25.00
2,405
28.18
16:31 to 17:00
15
8.72
783
9.18
17:01 to 17:30
17
9.88
822
9.64
17:31 to 18:00
21
12.21
878
10.29
18:01 to 18:30
13
7.56
845
9.91
18:31 to 19:00
15
8.72
1,250
14.65
172
100.00
8,533
100.00
Totals
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Federal Reserve Bank of St. Louis
-41-
TABLE 24
FEDWIRE RETURN OF FEDERAL FUNDS TRANSACTIONS
BY TIME OF DAY
($ amounts in millions)
Time
Number of
Transactions
8:31 to 9:00
43
6.04
3,397
10.92
9:01 to 9:30
0
0.00
0
0.00
9:31 to 10:00
34
4.78
1,503
4.83
10:01 to 10:30
11
l. 54
792
2.55
10:31 to 11:00
45
6.32
2,755
8.86
11:01 to 11:30
117
16.43
3,050
9.81
11:31 to 12:00
52
7.30
1,046
3.36
12:01 to 12:30
54
7.58
2,013
6.47
12:31 to 13:00
62
8.71
2,528
8.13
13:01 to 13:30
83
11. 66
3,283
10.56
13:31 to 14:00
57
8.01
3,349
10.77
14:01 to 14:30
36
5.06
1,576
5.07
14:31 to 15:00
34
4.78
1,735
5.58
15:01 to 15:30
1
0.14
50
0.16
15:31 to 16:00
0
0.00
0
0.00
16:01 to 16:30
37
5.20
2,483
7.98
16:31 to 17:00
30
4.21
929
2.99
17:01 to 17:30
12
1.69
485
l. 56
17:31 to 18:00
4
0.56
126
0.40
712
100.00
31,098
100.00
Totals
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Percent
Dollar
Amount
Percent
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
--42-
TABLE 25
FEDWIRE FEDERAL FUNDS TRANSACTIONS
Cumulative Percentage of Dollar
Value Sent by Time of Day
Sales
Returns
8:30
0.00%
0.00%
9:00
0.96
10.92
9:30
0.96
10.92
10:00
1.16
15.75
10:30
1.16
18.30
11:00
1.16
27.16
11:30
1. 46
36.97
12:00
1.46
40.33
12:30
1. 80
46.80
1:00
2.32
54.93
------------------ '-----------------------------1:30
3.10
65.49
2:00
5.39
76.26
2:30
9.76
81. 33
3:00
14.40
86.91
3:30
14.40
87.07
4:00
18.15
87.07
4:30
46.33
95.05
5:00
55.51
98.04
5:30
65.15
99.60
6:00
75.44
100.00%
6:30
85.35
7:00
100.00%
-43-
TABLE 26
FEDWIRE FEDERAL FUNDS TRANSACTIONS
DESTINATION BY FEDERAL RESERVE DISTRICT
($ amounts in millions)
Number of
Transactions
Percent
25
2.82
800.7
2.02
386
43.47
19,435.4
48.94
Philadelphia
22
2.48
605.4
1. 52
Cleveland
29
3.27
1,105.2
2.78
Richmond
27
3.04
716.0
1. 80
Atlanta
70
7.88
3,515.7
8.85
Chicago
62
6.98
2,089.3
5.26
St. Louis
29
3.27
668.2
1. 68
Minneapolis
18
2.03
871. 9
2.20
Kansas City
82
9.23
4,797.7
12.08
Dallas
25
2.82
1,166.1
2.94
San Francisco
113
12.73
3,937.8
9.92
Totals
888
100.00
39,709.4
100.00
i/Received by Survey
Participants.
237
26.69
9,938.2
25.03
District
Boston
New York ]J
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Dollar Amount
Percent
-44-
D. Commercial and Miscellaneous Transactions
The five statistical tables covering this category of
survey transactions are presented consecutively beginning with
Table 27 on page 45.
Because this survey reporting category included corporate
cash concentration and dispersion transactions, it is not surprising
that those transactions dominate both surveys.
Table 27, which
summarizes the CHIPS survey reporting schedules, shows that 80
percent by value of all such transactions involved cash concentration or dispersion by commercial customers.
For Fedwire (Table 28),
such transactions accounted for an even larger share--93 percent.
In both survey's, cash disbursements transactions (the downstreaming
of funds),
far exceeded those transactions associated with cash
concentrations (the upstreaming of funds), undoudtedly reflecting
the role of the survey participants as concentration banks.
Transactions involving purchases of goods or services were,
as expected, small in number and small in value on both wires.
Because most payments for goods and services do tend to be small in
value, the fact that transactions of under $1 million were excluded
from both samples undoubtedly accounts for their small numerical
presence in the two surveys.
Almost all Commercial and Miscellaneous transactions
captured in both surveys were for customer accounts; most of those
few identified as for the own accounts of the survey participants
were, unsurprisingly, associated with returns of erroneous transfers
or other corrections of error.
Those transactions falling within
the "other" survey category involved a wide array of purposes, the
most frequent of which was payment for purchases of precious metals.
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
-45The time-of-day profiles of payments, shown in Table 29 and
30 for the CHIPS and Fedwire surveys, respectively, indicate that
most Commercial and Miscellaneous transactions on both wires fall in
the latter half of the day.
This, of course, is consistent with the
dominance within this survey category of cash concentration/
dispersion transactions.
Worth noting, though, is the mid day
buldge in CHIPS that corresponds with the close of the European
business day.
The Fedwire destination data, presented in Table 31,
indicates that almost 74 percent by value of Commercial and
Miscellaneous payments remained within the Second Federal Reserve
District and that 94 percent of that (69 percent of the grand total
of such Fedwire payments) flowed between the nine survey participants.
Thus, much of the cash concentration/dispersion activity
that dominates this Fedwire transactions category simply reflects
the repositioning of balances during the day among multiple accounts
held at the nine clearing house banks by large commercial customers,
especially those held by large nondepository financial institutions.
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
-46-
TABLE 27
CHIPS COMMERCIAL AND MISCELLANEOUS TRANSACTIONS
COMPOSITE DESCRIPTION
($ amounts in millions)
Number of
Transactions
Percent
Dollar Amount
Percent
Transaction for:
7
5.34
2840
6.05
124
94.66
4,417
93.95
Purchase of Goods
or Services
15
11.45
298
6.33
Cash Concentration
in a Lead Account from
Other Accounts of the
Same Organization
19
14.50
1,432
30.46
Cash Dispersion from
a Lead Account to
Other Accounts of the
Same Organization
54
41.22
2,345
49.89
Domestic Time Deposit
Placement or Return
12
9.16
200
4.25
Return of Erroneous
Transfer or Other
Correction of Error
10
7.63
136
2.89
Other
20
15.27
286
6.07
1
0.76
5
0.11
Own Account
Customer
Nature of Transaction:
Unspecified
*****************************************************************
*****************************************************************
TOTALS
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
131
100.00
4,702
100.00
-47-
TABLE 28
FEDWIRE COMMERCIAL AND MISCELLANEOUS TRANSACTIONS
COMPOSITE DESCRIPTION
($ amounts in millions)
Number of
Transactions
Percent
Dollar Amount
Percent
Transaction for:
Own Account
21
3.89
252
1. 34
518
95.93
18,430
98.23
1
0.19
80
0.43
23
4.26
126
0.67
Cash Concentration
in a Lead Account from
Other Accounts of the
Same Organization
128
23.70
4,754
25.34
Cash Dispersion from
a Lead Account to
Other Accounts of the
Same Organization
316
58.52
12,619
67.26
Domestic Time Deposit
Placement or Return
15
2.78
165
0.88
Return of Erroneous
Transfer or Other
Correction of Error
15
2.78
399
2.13
Other
42
7.78
684
3.64
Customer
Unspecified
Nature of Transaction:
Purchase of Goods
or Services
14
Unspecified
0.19
0.07
1
*****************************************************************
*****************************************************************
18,762
100.00
540
100.00
TOTALS
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
-48-
TABLE 29
CHIPS COMMERCIAL AND MISCELLANEOUS TRANSACTIONS
BY TIME OF DAY
($ amounts in millions)
Time
Number of
Transactions
Percent
Dollar
Amount
Percent
7:31 to 8:00
2
1. 53
192
4.09
8:01 to 8:30
0
0.00
0
o.oo
8:31 to 9:00
1
0.76
2
0.03
9:01 to 9:30
2
1. 53
4
0.09
9:31 to 10:00
1
0.76
1
0.03
10:01 to 10:30
2
1. 53
230
4.89
10:31 to 11:00
6
4.58
52
1.11
11:01 to 11:30
11
8.40
176
3.75
11:31 to 12:00
10
7.63
435
9.26
12:01 to 12:30
11
8.40
1,044
22.20
12:31 to 13:00
2
1. 53
36
0.77
13:01 to 13:30
2
1. 53
130
2.77
13:31 to 14:00
13
9.92
170
3.62
14:01 to 14:30
17
12.98
205
4.37
14:31 to 15:00
10
7.63
620
13.19
15:01 to 15:30
14
10.69
329
7.00
15:31 to 16:00
20
15.27
998
21.23
16:01 to 16:30
7
5.34
75
1. 60
131
100.00
4,702
100.00
Totals
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
-49-
TABLE 30
FEDWIRE COMMERCIAL AND MISCELLANEOUS TRANSACTIONS
BY TIME OF DAY
{$ amounts in millions)
Time
Number of
Transactions
Percent
Dollar
Amount
Percent
8:31 to 9:00
1
0.19
5
0.03
9:01 to 9:30
6
1.11
82
0.44
9:31 to 10:00
4
0.74
70
0.37
10:01 to 10:30
12
2.22
590
3.14
10:31 to 11:00
14
2.59
377
2.01
11:01 to 11:30
37
6.85
1,601
8.53
11:31 to 12:00
16
2.96
206
1.10
12:01 to 12:30
24
4.44
250
1. 33
12:31 to 13:00
27
5.00
703
3.75
13:01 to 13:30
30
5.56
316
1. 68
13:31 to 14:00
26
4.81
1,039
5.54
14:01 to 14:30
30
5.56
472
2.52
14:31 to 15:00
48
8.89
1,833
9.77
15:01 to 15:30
0
0.00
0
0.00
15:31 to 16:00
6
1.11
89
0.47
16:01 to 16:30
86
15.93
4,005
21. 35
16:31 to 17:00
78
14.44
3,320
17.70
17:01 to 17:30
62
11.48
2,694
14.36
17:31 to 18:00
24
4.44
547
2.91
18:01 to 18:30
9
1. 67
562
3.00
540
100.00
18,762
100.00
Totals
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
-50-
TABLE 31
FEDWIRE COMMERCIAL AND MISCELLANEOUS TRANSACTIONS
DESTINATION BY FEDERAL RESERVE DISTRICT
($ amounts in millions)
Number of
Transactions
Percent
26
4.81
1,232.4
6.57
310
57.41
13,810.4
73.61
Philadelphia
27
5.00
265.7
1.42
Cleveland
21
3.89
363.0
1. 94
Richmond
22
4.07
281.1
1. 50
Atlanta
14
2.59
166.3
0.89
Chicago
46
8.52
1,625.4
8.66
7
1. 30
27.8
0.15
Minneapolis
13
2. 41
204.4
1.09
Kansas City
8
1.48
86.2
0.46
Dallas
11
2.04
82.9
0.44
San Francisco
35
6.48
616.2
3.28
Totals
540
100.00
18,761.8
100.00
l/Received by Survey
Participants.
267
49.44
12,928.2
68.91
District
Boston
New York l/
Dollar Amount
Percent
.
-----------------------------------------------------------------------
St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
-51E. Settlement Transactions
The Tables containing the survey statistics for this group
of transactions are numbered 32 through 36 and begin at page 52.
The composite summary of the CHIPS survey reporting
schedules, shown in Table 32, contains no surprises.
Correspondent
balance adjustments account for more than 84 percent by value of all
such reported CHIPS transactions, reflecting adjustments mostly by
foreign banks to their correspondent balances held with the nine
Clearing House banks.
One minor apparent anomaly in the CHIPS data
is the larger dollar amount of transactions attributed to settlement
of CEDEL positions than to Euroclear positions, given the larger
size of Euroclear, but that is partly offset by the presence of some
Euroclear settlement transactions in the Fedwire data.
However, the
higher dollar value associated with CEDEL is not necessarily a
reflection of the level of volume for either system, as both CEDEL
and Euroclear are net settlers.
Moreover, the roughly equal number
of transactions picked up for each system indicates that parties
deal with both systems.
With respect to the Fedwire data (see Table 33), correspondent balance adjustments dominate this group of transactions as
well.
While the share of total transactions by value is only 61
percent, versus 84 percent for CHIPS, that simply reflects the
presence in the Fedwire statistics of large payments into the
Federal Reserve Bank of New York to settle CHIPS positions.
After
excluding the latter from the transaction totals, correspondent
balance adjustments account for 87 percent of the remaining Fedwire
settlement transactions.
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
-52The pattern of payments by time of day, shown in Tables 34
and 35, reflects the fact that, by their nature, settlement
transactions occur later in the day.
The particularly heavy
concentration of Fedwire settlement transactions between 5:00 and
5:30 p.m., for instance, simply reflects that fact that payments
into the CHIPS settlement account occurred within that time frame.
An anomaly in the Fedwire Destination statistic shown in
Table 36 is also largely explained by the CHIPS settlement account.
While more than 65 percent of Fedwire settlement dollars went to
Second District receivers, only 31 percent of that flowed between
the Clearing House bank survey participants.
That results from the
fact that the survey picked up payments sent to the CHIPS settlement
account, but, of course, not payments received by survey participants
from the account,
(a net, net number) and payments sent to
correspondents for whom they settle on CHIPS (a net number).
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
-53-
TABLE 32
CHIPS SETTLEMENT TRANSACTIONS
COMPOSITE DESCRIPTION
($ amounts in millions)
Number of
Transactions
Percent
1
0.77
Dollar Amount
Percent
Transaction for:
Own Account
80
1.12
Customer
129
99.23
7,059
98.88
*****************************************************************
Purpose of Transaction:
CHIPS Position
11
8.46
224
3 .14
Euroclear Position
14
10.77
160
2.25
Cedel Position
15
11. 54
549
7.69
87
66.92
6,015
84.25
Depository Trust
Company Position
MBSCC Position
Check Clearings
Correspondent Balance
Adjustment
ACH Position
Other
2.31
191
2.68
3
*****************************************************************
*****************************************************************
TOTALS
130
100.00
7,140
100.00
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
-54-
TABLE 33
FEDWIRE SETTLEMENT TRANSACTIONS
COMPOSITE DESCRIPTION
($ amounts in millions)
Number of
Transactions
Percent
Dollar Amount
Percent
Transaction for:
Own Account
Customer
16
7.02
3,099
26 .41
212
92.98
8,636
73.59
12
5.26
3,573
30.45
4
1. 75
295
2.52
5
2.19
348
2.97
184
80.70
7,165
61.06
22
9.65
303
2.58
Purpose of Transaction:
CHIPS Position
Depository Trust
Company Position
MBSCC Position
Euroclear Position
Cedel Position
Check Clearings
Correspondent Balance
Adjustment
ACH Position
Other
Unspecified
1
0.44
50
0.43
*****************************************************************
*****************************************************************
11,735
100.00
228
100.00
TOTALS
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
-55-
TABLE 34
CHIPS SETTLEMENT TRANSACTIONS
BY TIME OF DAY
($ amounts in millions)
Time
Number of
Transactions
Percent
Dollar
Amount
Percent
7:00 to 7:30
3
2.31
40
0.56
7:31 to 8:00
6
4.62
122
1. 71
8:01 to 8:30
10
7.69
154
2.16
8:31 to 9:00
8
6.15
838
11. 73
9:01 to 9:30
1
0.77
29
0.41
9:31 to 10:00
0
0.00
0
0.00
10:01 to 10:30
7
5.38
140
1. 96
10:31 to 11:00
4
3.08
37
0.52
11:01 to 11:30
8
6.15
35
0.49
11:31 to 12:00
3
2.31
45
0.63
12:01 to 12:30
7
5.38
100
1. 39
12:31 to 13:00
6
4.62
914
12.80
13:01 to 13:30
7
5.38
1,046
14.65
13:31 to 14:00
14
10.77
670
9.38
14:01 to 14:30
12
9.23
229
3.21
14:31 to 15:00
18
13.85
1,586
22.22
15:01 to 15:30
5
3.85
280
3.93
15:31 to 16:00
8
6.15
782
10.95
16:01 to 16:30
3
2.31
92
1. 28
130
100.00
7,140
100.00
-------------------------------------------------------------------
Totals
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
-56TABLE 35
FEDWIRE SETTLEMENT TRANSACTIONS
BY TIME OF DAY
($ amounts in millions}
Time
Number of
Transactions
Percent
Dollar
Amount
Percent
8:31 to 9:00
2
0.88
269
2.29
9:01 to 9:30
1
0.44
70
0.60
9:31 to 10:00
5
2.19
419
3.57
10:01 to 10:30
5
2.19
126
1.08
10:31 to 11:00
1
0.44
10
0.09
11:01 to 11:30
12
5.26
788
6.71
11:31 to 12:00
4
1. 75
56
0.48
12:01 to 12:30
7
3.07
362
3.08
12:31 to 13:00
9
3.95
301
2.57
13:01 to 13:30
7
3.07
184
1. 57
13:31 to 14:00
11
4.82
102
0.87
14:01 to 14:30
13
5.70
357
3.04
14:31 to 15:00
16
7.02
318
2.71
15:01 to 15:30
3
1. 32
328
2.80
15:31 to 16:00
4
1. 75
504
4.30
16:01 to 16:30
36
15.79
1,197
10.20
16:31 to 17:00
29
12.72
1,125
9.59
17:01 to 17:30
37
16.23
4,129
35.19
17:31 to 18:00
12
5.26
430
3.67
18:01 to 18:30
12
5.26
647
5.51
18:31 to 19:00
2
0.88
11
0.09
228
100.00
11,735
100.00
Totals
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
-57-
TABLE 36
FEDWIRE SETTLEMENT TRANSACTIONS
DESTINATION BY FEDERAL RESERVE DISTRICT
($ amounts in millions)
Number of
Transactions
Percent
Boston
10
4.39
246.8
2.10
New York l/
98
42.98
7,674.3
65.40
Philadelphia
14
6.14
660.8
5.63
Cleveland
15
6.58
832.9
7.10
Richmond
11
4.82
119.7
1.02
Atlanta
11
4.82
171.8
1. 46
Chicago
19
8.33
941. 0
8.02
St. Louis
6
2.63
64.7
0.55
Minneapolis
4
1. 75
31. 9
0.27
Kansas City
4
1. 75
50.8
0.43
Dallas
9
3.95
164.8
1. 40
27
11. 84
775.4
6.61
228
100.00
11,734.7
100.00
35
15.35
2,375.8
20.24
District
San Francisco
Totals
i/Received by Survey
Participants.
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
•
Dollar Amount
Percent
-58Schedule F:
Eurodollar Placements/Returns
Tables 37 through 43, beginning consecutively at page 61,
summarize the survey data for this class of transactions.
The composite summaries of the survey reporting forms shown
first in Tables 37 and 38 give further indication of the significant
differences in the customer constituencies of CHIPS and Fedwire.
As
shown in tables 37 and 38, fully 90 percent by value of all CHIPS
Eurodollar placement transactions were undertaken for the accounts
of foreign customers, and foreign offices of the bank whereas only
26 percent of Fedwire transactions were for foreign customers.
this regard,
In
it should be noted that the reporting schedule for
these transactions instructed the survey participants to "treat
foreign offices of all banks (including your own) as being 'foreign
customers', and treat U.S. offices of foreign banks as being
'domestic customers'."
Thus, a survey participant initiating a
Eurodollar transaction (either a placement or a return) on behalf of
its own, or anyone else's, foreign office would treat that as a
transaction for a ''foreign" customer.
Similarly, any transaction
initiated for the account of a U.S. office of a foreign bank would
appear as a transaction for a domestic customer.
The survey
instruction was framed in this fashion so as to identify the
decision centers from which the payment instructions originated.
CHIPS Eurodollar transactions were also more heavily for
the account of foreign customers and the bank's overseas branches
than were Fedwire transactions--94 percent versus 76 percent.
That
difference also stems from the domestic orientation of the Fedwire
transactions; most of the 21 percent by value of Fedwire
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
-59transactions that were for the accounts of others than banks--i.e.,
for nonbank financial and nonfinancial customers--involved
domestically based organizations.
The percentage of Eurodollar placements/returns by maturity
for the one day category was, as shown in Tables 37 and 38,
essentially the same for CHIPS and Fedwire.
Also, the maturity
distribution for the greater than one-day placements was broadly
similar, with three-fourths of all term transactions on both wires
having maturity of from two to thirty days.
CHIPS term Eurodollar placement was, however,
The average maturity of
longer than the
average maturity on Fedwire--41 days versus 27 days-- reflecting the
fact that the CHIPS data contained a few very long maturity
placements.
The division of Eurodollar transactions between original
placements and repayments is noticeably different between the two
surveys.
In the case of CHIPS, the dollar value of the original
placements dominate moderately with 56 percent of total transactions
value, whereas in the Fedwire survey return transactions dominate
strongly with 70 percent of total transactions value.
Apparently,
this again reflects, particularly in the case of the Fedwire data,
the fact that the survey was limited to payments sent by the survey
participants.
Many Fedwire Eurodollar placements being made by
domestic customers probably involve an incoming Fedwire payment,
and may then involve either a transaction across the books of the
receiving Clearing House bank, an outgoing CHIPS payment or an
outgoing Fedwire payment.
Either of the first two possibilities
would diminish the presence of original placements (but not returns)
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
-60in the Fedwire survey, and the second of the two could account for
the somewhat greater amount of original placements than returns in
the CHIPS data as well.
The categorizations in Tables 37 and 38 of the "purpose" of
Eurodollar transactions include some doubtful entries.
Most survey
participants, however, correctly categorized original Eurodollar
placements as "investment" transactions and return transactions as
the unwinding of "funding" transactions.
The other categories that
were occasionally designated were intended to apply primarily to the
foreign exchange transactions which reporting Schedule F was also
designed to capture.
Table 39 and 40 present the time-of-day pattern of all
Eurodollar transactions on CHIPS and Fedwire, respectively.
The
majority of such transactions occurred in the latter half of the day
on both wires.
However, a more interesting breakdown is that shown
in the next two Tables--41 and 42--which divide Eurodollar transactions between placement and returns and present the cumulative
percentages of each sent by time of day.
Interestingly, these data
for CHIPS, while showing that CHIPS Eurodollar returns do occur
earlier in the day than new placements, indicate only a relatively
small timing disparity between the two payments flows.
By contrast,
the cumulative percentages shown for Fedwire indicate a wide
disparity between returns and placements, approaching that between
Federal Funds returns and sales discussed earlier.
For instance,
at 2:00 p.m. 60 percent by value of all the day's Eurodollar returns
on Fedwire had been coupled, while only 15 percent of placement had
been effected.
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
-61The closer timing match between Eurodollar placements and
returns on CHIPS than on Fedwire may reflect the fact that CHIPS
Eurodollar transactions are primarily for foreign customers in
earlier time zones than those applicable to the domestic customers
that predominate on Fedwire.
However, that conclusion is
problematical since the better match between placements and returns
on CHIPS, as compared to Fedwire, lies more in the relatively
earlier timing of CHIPS Eurodollar placements, while the intra-day
timing of returns is much the same for the two wires after taking
account of their different opening and closing times.
The Fedwire destination statistics by Federal Reserve
District, shown in Table 43, indicate an unusually high percentage
of payments going to the Boston District.
That reflects the return
of Eurodollar placements to several large money market mutual funds
headquartered in Boston.
Also, the sizable flow of payments to the
Kansas City District in large part reflects returns of placements to
the United Sates Credit Union Central located in that district.
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
TABLE 37
CHIPS EURODOLLAR TRANSACTIONS
COMPOSITE DESCRIPTION
($ amounts in millions)
Number of
Transactions
Percent
Dollar Amount
Percent
Origination:
In U.S. for own
account
In U.S. for
Domestic Customer
Outside U.S.
6
0.91
91
0.50
66
10.02
1,644
9.00
587
89.07
16,524
90.50
*****************************************************************
Customer Type:
Bank
614
93.17
17,183
94.11
34
5.16
857
4.69
Nonfinancial
9
1.37
203
1.11
Unspecified
2
0.30
17
0.09
Nonbank Financial
*****************************************************************
Maturity:
One Day
476
72.23
13,615
74.56
Greater than One Day
108
16.39
2,471
13.53
75
11. 38
2,174
11. 91
Unspecified
*****************************************************************
Nature of Transaction:
Original Placement
379
57.51
10,301
56.41
Repayment
280
42.49
7,959
43.59
*****************************************************************
Purpose:
Trade
Investment
Trading/Positioning
Funding
Other
Unspecified
44
6.68
1,239
6.78
310
47.04
8,378
45.88
68
10.32
2,060
11. 28
152
23.07
4,673
25.59
7
1.06
129
0.71
78
11.84
1,781
9.75
*****************************************************************
*****************************************************************
TOTALS
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
659
100.00
18,259
100.00
TABLE 38
FEDWIRE EURODOLLAR TRANSACTIONS
COMPOSITE DESCRIPTION
($ amounts in millions)
Number of
Transactions
Percent
Dollar Amount
Percent
Origination:
In U.S. for
own account
In U.S. for
Domestic Customer
Outside U.S.
8
2.77
350
3.12
218
75.43
7,942
70.91
63
21. 80
2,908
25.96
*****************************************************************
Customer Type:
Bank
202
69.90
8,490
75.80
Nonbank Financial
23
7.96
1,145
10.22
Nonfinancial
58
20.07
1,247
11.13
6
2.80
319
2.85
Unspecified
*****************************************************************
Maturity:
One Day
201
69.55
8,412
75.10
Greater than One Day
30
10.38
1,196
10.67
Unspecified
58
20.07
1,593
14.22
*****************************************************************
Nature of Transaction:
Original Placement
124
42.91
3,321
29.65
Repayment
165
57.09
7,880
70.35
*****************************************************************
Purpose:
Trade
Investment
Trading/Positioning
Funding
Other
Unspecified
11
3.81
161
1.44
113
39.10
3,872
34.57
4
1. 38
190
1. 69
115
39.79
5,665
50.58
4
1. 38
61
0.54
42
14.53
1,252
11.17
*******************************************************************
*******************************************************************
TOTALS
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
289
100.00
11,200
100.00
-64-
TABLE 39
CHIPS EURODOLLAR TRANSACTIONS
BY TIME OF DAY
($ amounts in millions)
Time
Number of
Transactions
Percent
Dollar
Amount
Percent
7:01 to 7:30
5
0.76
9
0.05
7:31 to 8:00
20
3.03
591
3.22
8:01 to 8:30
29
4.39
582
3.17
8:31 to 9:00
29
4.39
227
1. 24
9:01 to 9:30
20
3.03
554
3.02
9:31 to 10:00
16
2.42
430
2.34
10:01 to 10:30
21
3.18
369
2.01
10:31 to 11:00
39
5.90
887
4.83
11:01 to 11:30
64
9.68
1,583
8.63
11:31 to 12:00
36
5.45
991
5.40
12:01 to 12:30
41
6.20
966
5.26
12:31 to 13:00
54
8.17
1,354
7.38
13:01 to 13:30
32
4.84
538
2.93
13:31 to 14:00
55
8.32
1,616
8.80
14:01 to 14:30
29
4.39
1,159
6.32
14:31 to 15:00
46
6.96
1,373
7.48
15:01 to 15:30
46
6.96
1,619
8.82
15:31 to 16:00
54
8.17
2,541
13.84
16:01 to 16:30
25
3.78
964
5.25
661
100.00
18,354
100.00
Totals
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
-65-
TABLE 40
FEDWIRE EURODOLLAR TRANSACTIONS
BY TIME OF DAY
($ amounts in millions}
Time
Number of
Transactions
Percent
Dollar
Amount
Percent
8:31 to 9:00
8
2.77
672
6.00
9:01 to 9:30
2
0.69
125
1.12
9:31 to 10:00
2
0.69
31
0.28
10:01 to 10:30
6
2.08
243
2.17
10:31 to 11:00
14
4.84
553
4.94
11:01 to 11:30
12
4.15
324
2.89
11:31 to 12:00
12
4.15
539
4.81
12:01 to 12:30
5
1. 73
53
0.47
12:31 to 13:00
22
7.61
731
6.53
13:01 to 13:30
12
4.15
134
1.20
13:31 to 14:00
27
9.34
469
4.19
14:01 to 14:30
36
12.46
1,700
15.18
14:31 to 15:00
39
13.49
1,599
14.28
15:01 to 15:30
4
1. 38
106
0.95
15:31 to 16:00
2
0.69
35
0.32
16:01 to 16:30
38
13.15
1,377
12.29
16:31 to 17:00
31
10.73
1,895
16.92
17:01 to 17:30
12
4.15
467
4.17
17:31 to 18:00
5
1. 73
147
1. 31
289
100.00
11,200
100.00
Totals
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
-66-
TABLE 41
CHIPS EURODOLLAR PLACEMENTS/RETURNS
Cumulative Percentage of Dollar
Value Sent by Time of Day
Time
Placements
Returns
7:30
0.90%
0.00%
8:00
2.67
4.11
8:30
5.49
7.76
9:00
7.15
8.47
9:30
8.54
13.63
10:00
8.74
18.78
10:30
10.03
21.74
11:00
15.53
25.76
11:30
19.97
39.91
25.75
44.87
12:30
32.07
48.84
13:00
41.48
53.68
13:30
44.69
56.29
14:00
53.71
64.28
14:30
58.04
73.24
15:00
65.65
80.64
15:30
77.27
85.94
16:00
94.53
94.97
16:30
100.00%
100.00%
12:00
------------------------------------------------------\
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
-67TABLE 42
FEDWIRE EURODOLLAR PLACEMENTS/RETURNS
Cumulative Percentage of Dollar
Value Sent by Time of Day
Time
Placements
Returns
8:30
0.00%
0.00%
9:00
0.00
8.53
9:30
0.00
10.12
10:00
0.00
13.54
10:30
0 .14
20.56
11:00
0.14
24.55
11:30
0.43
31.16
12:00
0.97
31.61
12:30
1. 50
37.98
13:00
8.41
39.22
13:30
9.49
42.92
14:00
14.83
59.51
14:30
26.66
72.40
15:00
44.22
73.46
15:30
44.91
73.46
16:00
45.98
79.83
16:30
72.33
97.24
17:00
88.06
98.73
17:30
98.59
100.00%
18:00
100.00%
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
-68-
TABLE 43
FEDWIRE EURODOLLAR TRANSACTIONS
DESTINATION BY FEDERAL RESERVE DISTRICT
($ amounts in millions)
Number of
Transactions
Percent
17
5.88
1,475.3
13.17
182
62.98
7,094.4
63.34
Philadelphia
6
2.08
84.6
0.76
Cleveland
8
2.77
266.9
2.38
Richmond
6
2.08
161.5
1.44
Atlanta
2
0.69
8.1
0.07
Chicago
18
6.23
369.7
3.30
St. Louis
1
0.35
10.0
0.09
Minneapolis
0
0.00
o.o
0.00
Kansas City
4
1.38
401. 2
3.58
Dallas
7
2.42
271.1
2.42
38
13.15
1,057.6
9.44
Totals
289
100.00
11,200.5
100.00
i1Received by Survey
Participants.
144
49.83
5,560.8
49.65
District
Boston
New York ]J
San Francisco
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Dollar Amount
Percent
-69Schedule F:
Foreign Exchange Transactions
The various tables summarizing this survey category of
transactions appear consecutively as Tables 44 through 49, beginning
at page 70.
As suggested earlier, the 27 foreign exchange transactions
reported in the Fedwire survey are too few in number to have much
solid informational content.
Nonetheless, they do show the sorts
of differences with the CHIPS data that would be expected.
For
instance, in the composite survey summaries presented in Tables 44
and 45, 80 percent by value of Fedwire transactions were for
domestic customers, while less than 12 percent of CHIPS transactions
.
d .2/
were so categorize
Moreover, 90 percent of all CHIPS trans-
actions (by value) were identified as for the account of banks (own
account plus "customers" banks), while only 18 percent of Fedwire
transactions were placed in that category.
The contract types specified for foreign exchange transactions appear consistent with market statistics gathered in other
surveys.
Looking at the two surveys aggregated, spot contacts
thoroughly dominate both numbers and dollar value of transactions,
with option contracts ranking second and forward contracts third.
A rather surprising survey finding is the insignificant
share of foreign exchange transactions specifically identified as
related to international trade in goods and services, and the
correspondingly overwhelming share of transactions attributed to
trading and positioning activity.
However, both finding may simply
Again, in this reporting form, survey respondents were asked to
treat foreign offices of all banks, including their own, as being
foreign customers, and to treat U.S. offices of foreign banks as
being domestic customers.
J/
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
-70reflect the fact that banks manage foreign exchange portfolios
rather than individual customer transactions, and hence are unable
to tie transactions made from a portfolio perspective back to
specific individual transactions initiated by their commercial
customers.
Tables 46 and 47 list foreign exchange transactions by time
of day for CHIPS and Fedwire respectively. The CHIPS transactions
are spread quite evenly throughout the day, both in numbers of
transactions and dollar value.
By contrast, the Fedwire foreign
exchange transactions were bunched at the end of the day, with
half of the transactions and 70 percent of the transactions value
occurring after the 4:30 p.m. CHIPS close.
The peculiar time
profile suggests the possibility Fedwire may have simply served
as the vehicle for effecting some transactions that for one reason
or another could not be made over CHIPS in a timely fashion.
That
conclusion is also consistent with the Fedwire destination data
(Table 48), which show that all but one of the Fedwire payments
went to Second District receivers.
Finally, Table 49 lists the foreign exchange transactions
in each survey broken down by the currencies most frequently
identified in the responses.
Not surprisingly, the Japanese Yen
and the German Mark were the dominant currencies transacted, with
the Yen accounting for the greater transactions value and the Mark
the larger number of transactions.
The British Pound was third in
both frequency and value of transactions, while the Canadian Dollar,
the Swiss Franc and the French Franc closely competed for the
ranking of fourth.
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
TABLE 44
CHIPS FOREIGN EXCHANGE TRANSACTIONS
COMPOSITE DESCRIPTION
($ amounts in millions)
Number of
Transactions
Percent
Dollar Amount
Percent
Origination:
In U.S. for own
account
109
6.15
1,536
6.54
In U.S. for
Domestic Customer
109
6.15
2,743
11.69
1,555
87.70
19,197
81. 77
Outside U.S.
*****************************************************************
Customer Type:
1,581
89.17
19,648
83.69
112
6.32
3,008
12.81
Nonfinancial
14
0.79
188
0.80
Unspecified
66
3.72
632
2.69
Bank
Nonbank Financial
*****************************************************************
Contract Type:
1,332
75.13
13,755
58.59
89
5.02
1,394
5.94
110
6.20
3,455
14.72
Option
4
0.23
48
0.20
Other
8
0.45
116
0.49
230
12.97
4,708
20.05
Spot
Forward
Swap
Unspecified
*****************************************************************
Purpose:
Trade
17
0.96
395
1. 68
Investment
19
1.07
442
1.88
1,678
94.64
21,547
91. 78
10
0.56
103
0.44
2
0.11
15
0.06
47
2.65
974
4.15
Trading/Positioning
Funding
Other
Unspecified
*****************************************************************
*****************************************************************
TOTALS
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
1,773
100.00
23,476
100.00
TABLE 45
FEDWIRE FOREIGN EXCHANGE TRANSACTIONS
COMPOSITE DESCRIPTION
($ amounts in millions)
Number of
Transactions
Percent
Dollar Amount
Percent
Origination:
In U.S. for own
account
In U.S. for
Domestic Customer
1
3.70
5
2.04
19
70.37
195
79.71
Outside U.S.
7
25.93
45
18.25
*****************************************************************
Customer Type:
Bank
11
40.74
39
15.76
Nonbank Financial
10
37.04
158
64.42
5
18.52
43
17.77
Nonfinancial
Unspecified
1
3.70
2.04
5
*****************************************************************
Contract Type:
Spot
12
Forward
44.44
75
30.72
11.11
26
10.43
Swap
4
14.81
43
17.59
Option
3
11.11
85
34.74
Other
1
3.70
2
0.92
Unspecified
4
14.81
14
5.59
*****************************************************************
Purpose:
Trade
1
3.70
7
2.69
Investment
1
3.70
2
0.92
24
88.89
227
92.84
Trading/Positioning
Funding
Other
Unspecified
3.56
1
3.70
9
*****************************************************************
*****************************************************************
TOTALS
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
27
100.00
245
100.00
-73TABLE 46
CHIPS FOREIGN EXCHANGE TRANSACTIONS
BY TIME OF DAY
($ amounts in millions)
Time
Number of
Transactions
Percent
Dollar
Amount
Percent
7:01 to 7:30
36
2.03
402
1. 72
7:31 to 8:00
165
9.32
1,686
7.21
8:01 to 8:30
154
8.70
1,302
5.57
8:31 to 9:00
112
6.32
951
4.07
9:01 to 9:30
139
7.85
1,403
6.00
9:31 to 10:00
62
3.05
402
1. 72
10:01 to 10:30
96
5.42
1,179
5.04
10:31 to 11:00
131
7.40
1,220
5.22
11:01 to 11:30
126
7.11
1,497
6.40
11:31 to 12:00
71
4.01
1,085
4.64
12:01 to 12:30
121
6.83
1,486
6.36
12:31 to 13:00
75
4.23
833
3.56
13:01 to 13:30
101
5.70
1,227
5.25
13:31 to 14:00
105
5.87
2,094
8.74
14:01 to 14:30
82
4.63
2,073
8.87
14:31 to 15:00
78
4.40
1,817
7.77
15:01 to 15:30
51
2.88
950
4.07
15:31 to 16:00
43
2.37
1,277
5.27
16:01 to 16:30
25
1.41
592
2.53
1,773
100.00
23,476
100.00
Totals
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
-74-
TABLE 47
FEDWIRE FOREIGN EXCHANGE TRANSACTIONS
BY TIME OF DAY
($ amounts in millions)
Time
Number of
Transactions
Percent
Dollar
Amount
Percent
9:31 to 10:00
2
7. 41
8
3.10
10:01 to 10:30
1
3.70
11
4.66
10:31 to 11:00
1
3.70
5
2.13
11:01 to 11:30
1
3.70
2
0.92
11:31 to 12:00
2
7.41
19
7.75
12:01 to 12:30
0
0.00
0
0.00
12:31 to 13:00
1
3.70
1
0.60
13:01 to 13:30
0
0.00
0
0.00
13:31 to 14:00
2
7.41
4
1. 64
14:01 to 14:30
1
3.70
5
2.04
14:31 to 15:00
2
7.41
12
5.08
15:01 to 15:30
0
0.00
0
0.00
15:31 to 16:00
0
0.00
0
0.00
16:01 to 16:30
1
3.70
3
1. 23
16:31 to 17:00
7
25.93
63
25.64
17:01 to 17:30
1
3.70
9
3.56
17:31 to 18:00
4
14.81
97
39.61
18:01 to 18:30
1
3.70
5
2.04
27
100.00
245
100.00
Totals
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
-75-
TABLE 48
FEDWIRE FOREIGN EXCHANGE TRANSACTIONS
DESTINATION BY FEDERAL RESERVE DISTRICT
($ amounts in millions)
District
Boston
Number of
Transactions
Percent
Dollar Amount
Percent
1
3.85
10.4
4.29
New York l/
25
96.15
232.2
95.71
Totals
26
100.00
242.6
100.00
],/Received by Survey
Participants.
15
57.69
80.7
33.26
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
TABLE 49
FOREIGN CURRENCY TRANSACTIONS BY CURRENCY BY WIRE SYSTEM
{$ Amounts in Millions)
CHIPS
Currency
Number of
Transactions
Percent
Dollar
Amount
Percent
Australian Dollar ....
Austrian Schilling ...
12
0.8
79
0.4
1
0.1
5
0.0
Belgian Franc ........
British Pound ........
12
0.8
208
1.1
189
12.2
2,043
Canadian Dollar ......
Danish Krone .........
50
3.2
4
French Franc .........
German Mark ..........
Number of
Transactions
Fedwire
Dollar
Percent Amount
Percent
1
4.3
5
2.3
10.9
1
4.3
16
7.1
1,025
5.5
1
4.3
15
6.5
0.3
36
0.2
89
5.8
1,406
7.5
522
33.8
5,187
27.6
5
21. 7
48
20.7
Hong Kong Dollar .....
Italian Lira .........
6
0.4
55
0.3
29
1. 9
208
1.1
Japanese Yen .........
385
25.0
6,078
32.4
Netherlands Guilder ..
New Zealand Dollar ...
14
0.9
196
1.0
3
0.2
14
0.1
Norwegian Krone ......
Singapore Dollar .....
5
0.3
45
0.2
10
0.6
79
0.4
I
-.I
O"I
I
9
39.1
101
43.8
1
4.3
10
4.5
Spanish Peseta .......
Swiss Franc ..........
16
1.0
58
0.3
105
6.8
824
4.4
Other Specified ......
33
2.1
360
1.9
52
3.4
822
4.4
4
17.4
26
11. 2
Multiple Currencies ..
6
0.4
39
0.2
1
4.3
9
3.9
Totals ...............
1,543
100.0
18,768
100.0
23
100.0
231
100.0
Currencies
Unspecified ..........
Currencies
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
-77-
APPENDIX
SURVEY QUESTIONNAIRE FORMS
-A-1-
Schedule A
OOLLAR TRANSFER RELATED 'ID SECURITIES PURCHASE/REDEMPTION/FINAN:Ill;
2. Fedwire
- - - 1. CBIPS
Message Time: - - - - - -
Sending Bank Name:
Receiving Bank Name:
Amount of Transfer:
$
----------
Payment Instruction Initiated By/For:
1. Bank's Own Invesbnent Account
2. Bank's Own Trading Account
3. Bank's Own Other Account
(Specify account)
4. Broker/Dealer
(Specify firm's name and type of account)
5. Investor Customer
(Specify customer's name and type of account)
6. Security Issuer
Instrument:
(Name of Issuer
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
Bankers Acceptance
Book-Entry Security--Fedwire
Certificate of Deposit--Domestic
Certificate of Deposit--Euro
Corrmercial Paper
Corporate Bond/Note
Corporate Stock
EurobondjNote
Mortgage-Backed Security--Definitive
Municipal Security
Other
(Specify)
12. Miscellaneous Pool of Loan Collateral
Nature of Transaction:
1.
2.
3.
4.
- - 5.
6.
- - 7.
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
1. New Issue Transaction
2. Secondary Market Transaction
3. Payment at Maturity
Investment
Trading
Underwriting
Repurchase Agreement
Collateralized Broker/Dealer Loan
Safekeeping Transaction
Other
(Please describe)
-A-2-
Schedule B
BANK LOAN TRANSACTIONS*
1. CHIPS
2. Fedwire
Message Time:
Sending Bank Name:
Receiving Bank Name: __________________________
Amount of Transaction:
$
----------
Name of Borrower
Business of Borrower
Nature of Transaction:
1. Disbursement of Principal to Borrower
2. Purchase of Loan Participation
3. Customer Drav-Klown on Loan Facility
4. Payment by This Bank's customer on a Third-Party Loan
5. Payment to Lead/Agent Bank of This Bank's Share of a
Syndicated Loan
6. Disbursement of Borrower's Payments Received by This Bank to Another
Participant in Our Syndicated/Participated Loan
*
Include all loans other than loans to finance securities brokers or
dealers. The latter are to be reported on Schedule A.
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
-A-3-
Schedule C
FEDERAL FUNDS TRANSACTIONS
1. CHIPS
2. Fedwire
Message Time - - - - -
Sending Bank Name:
Receiving Bank Name:
Amount of Transfer:
$
---------
Transaction For:
1. OWn Account
2. Customer (name)
Nature of Transaction:
1. Sale of Federal Funds
2. Return of Federal Funds Purchased
Original Maturity:
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
1. Overnight
2. Continuing Contract
3. Term (specify)
(Number of days)
-A-4-
schedule D
CC1+1ERCIAL AND MISCELLANEDUS TRANSACTIONS
l. CHIPS
2. Fedwire
Message Time:
-----
Sending Bank Name:
Receiving Bank Name:
Amount of Transfer:
$
-----------
Transaction For:
l. OWn Account
2. Customer (name)
-------------------------
Nature of Transaction:
1. Purchase of Goods or Services
2. Concentration in a Lead Account of Cash from Other Accounts of the
Sarne Organization*
3. Dispersion From a Lead Account of cash to Other Accounts of the
Sarne Organization*
4. Domestic Time Deposit Placement/Return
5. Return of Erroneous Transfer or Other Correction of Error
6. Other** (Please describe)
--------------------
* Should also include, where appropriate, transfers between affiliates of
the same organization.
** Should not be used to record transfers to settle CHIPS, Euroclear, Cedel
or similar positions; refer to Schedule E.
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
-A-5-
Schedule E
SETI'LEMENI' TRANSACTIONS
1. CHIPS
2. Fedwire
Message Time:
----
Sending Bank Name:
Receiving Bank Name:
Amount of Transfer:
$
---------
Transaction For:
1. OWn Account
2. Customer (name)
Purpose of Transaction:
Settlement of:
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
1.
2.
3.
4.
5.
6.
7.
8.
9.
CHIPS Position
Depository Trust Company Position
MBSCC Position
Euroclear Position
Cedel Position
Check Clearings
Correspondent Balance Adjustment
ACH Position
Other ---------,---------,-.,,......,,--------(Please specify)
-A-6-
Schedule F
DOLLAR TRANSFERS RELA'rED 'l'O FOREIGN EXCHANGE/EURODOLLAR PLACEMENTS
- - - i.
2. Fedwire
CHIPS
Message Time:
Sending Bank Name:
Receiving Bank Name and Location:
Amount of ·rransfer:
$
----------
Payment Instruction Initiated By/For:**
1. Bank's Own Account
2. Domestic Customer
----------.,..----,-,--------------
(Spec if y Name)
___ 3. Foreign customer---------,--~,,-------,-----,------
(Specify Name and Country)
Princ1.pa1 Business Class1.fication of Customer (Please Check):
- - - 5. Noooank Financial Institution
- - - 4. Bank
6. Nonfinancial Insti~ution
Nature of Transaction:
EuroJallar Depos1. t/P la cement for - - - - days ( Specify Or igrnal Term and Check Belo1
i. Onginai ·.i:1ransaction
_ _ 2. Repayment
Foreign Excha,1ge Transaction-..,...,.-,----,------:-----------,--------------,--(Give Narne of Currency and Cneck Below)
_ _ 3. Spot
6. Opt1.on
- - - 4. Forwara
5. Swap
- - - 7. Otner (specify)
Purpose of ·rransaction:
l. ·rrade/Service Re1ated
- - - 2. Investment
- - - 3. Foreign Exchange Trading/Positioning
___ 4. Funding of Position
_ _ 5. Other (specify)
** For purposes of this section, please treat foreign ott1ces of ail banks (including
your 0\~1) as oeing "foreign customers", and treat U.S. offices of foreign banks as being
"domestic customers".
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
@FedFRASER