An economic perspective on the enforcement of credit arrangements: the case of daylight overdrafts in Fedwire

A fundamental concern for any lender is credit risk - the risk that a borrower will fail to fully repay a loan as expected. Thus, lenders want credit arrangements that are designed to compensate them for - and help them effectively manage - this type of risk. In certain situations, central banks engage in credit arrangements as lenders to banks, so they must manage their exposure to credit risk. This article discusses how the Federal Reserve manages its credit risk exposure associated with daylight overdrafts. The authors first present a simple economic framework for thinking about the causes of credit risk and the possible tools that lenders have to help them manage it. They then apply this framework to the Federal Reserve's Payments System Risk policy, which specifies the use of a variety of tools to manage credit risk. The study also analyzes a possible increase in the use of collateral as a credit risk management tool, as presented in a recent proposal by the Federal Reserve concerning changes to the Payments System Risk policy.Payment systems ; Federal Reserve System ; Credit ; Risk management

The gauge structure of generalised diffeomorphisms

We investigate the generalised diffeomorphisms in M-theory, which are gauge transformations unifying diffeomorphisms and tensor gauge transformations. After giving an En(n)-covariant description of the gauge transformations and their commutators, we show that the gauge algebra is infinitely reducible, i.e., the tower of ghosts for ghosts is infinite. The Jacobiator of generalised diffeomorphisms gives such a reducibility transformation. We give a concrete description of the ghost structure, and demonstrate that the infinite sums give the correct (regularised) number of degrees of freedom. The ghost towers belong to the sequences of rep- resentations previously observed appearing in tensor hierarchies and Borcherds algebras. All calculations rely on the section condition, which we reformulate as a linear condition on the cotangent directions. The analysis holds for n < 8. At n = 8, where the dual gravity field becomes relevant, the natural guess for the gauge parameter and its reducibility still yields the correct counting of gauge parameters.Comment: 24 pp., plain tex, 1 figure. v2: minor changes, including a few added ref

Metabolomic study of the LDL receptor null mouse fed a high-fat diet reveals profound perturbations in choline metabolism that are shared with ApoE null mice

Failure to express or expression of dysfunctional low-density lipoprotein receptors (LDLR) causes familial hypercholesterolemia in humans, a disease characterized by elevated blood cholesterol concentrations, xanthomas, and coronary heart disease, providing compelling evidence that high blood cholesterol concentrations cause atherosclerosis. In this study, we used 1H nuclear magnetic resonance spectroscopy to examine the metabolic profiles of plasma and urine from the LDLR knockout mice. Consistent with previous studies, these mice developed hypercholesterolemia and atherosclerosis when fed a high-fat/cholesterol/cholate-containing diet. In addition, multivariate statistical analysis of the metabolomic data highlighted significant differences in tricarboxylic acid cycle and fatty acid metabolism, as a result of high-fat/cholesterol diet feeding. Our metabolomic study also demonstrates that the effect of high-fat/cholesterol/cholate diet, LDLR gene deficiency, and the diet-genotype interaction caused a significant perturbation in choline metabolism, notably the choline oxidation pathway. Specifically, the loss in the LDLR caused a marked reduction in the urinary excretion of betaine and dimethylglycine, especially when the mice are fed a high-fat/cholesterol/cholate diet. Furthermore, as we demonstrate that these metabolic changes are comparable with those detected in ApoE knockout mice fed the same high-fat/cholesterol/cholate diet they may be useful for monitoring the onset of atherosclerosis across animal models