Payment services depository institutions such as

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Unformatted text preview: especially encouraged, via special taxation relief and other subsidy mechanisms, to service and accommodate those needs. Payment Services Depository institutions such as banks and thrifts are special in that the efficiency with which they provide payment services directly benefits the economy. Two important payment services are check-clearing and wire transfer services. For example, on any given day, trillions of dollars worth of payments are effected through Fedwire and CHIPS, the two large wholesale payment wire networks in the United States. Any breakdowns in these systems probably would produce gridlock in the payment system with resulting harmful effects to the economy. Denomination Intermediation Both money market and debt-equity mutual funds are special because they provide services relating to denomination intermediation. Because they are sold in very large denominations, many assets are either out of reach of individual savers or would result in savers holding highly undiversified asset portfolios. For example, the minimum size of a negotiable...
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This document was uploaded on 03/09/2014 for the course ACC 301 at HELP University.

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