Changes in the Timing Distribution of Fedwire Funds Transfers

[...]We observe several trends in payment timing from 1998 to2006. After 2000, the peak in payment activity shifts to laterin the day. Indeed, post-2000, a greater concentration ofpayments occurs after 17:00. At the same time, however, severalfactors have been associated with increased payment activityearly in the day, such as the creation of the Continuous LinkedSettlement (CLS) Bank, an institution that settles U.S. dollarpayments early in the morning; changes to the Clearing HouseInterbank Payments System’s (CHIPS) settlement practices;and expanded Fedwire operating hours. Despite thesedevelopments, we find that the distribution of payment activityacross the day still peaks more in the late afternoon.[...]