Chakravorti and To construct a two-period model to study the interactions among consumers, merchants, and a card issuer. The model yields the following results. First, if the issuer's cost of funds is not too high and the merchant's profit margin is sufficiently high, in every equilibrium of our model the...
The Mexican securities clearance and settlement system is ahead of many markets in terms of having one of the shortest settlement periods. However, cross-border transactions—such as those involving American Depositary Receipts—have tended to be associated with a greater number of settlement fails than purely domestic transactions because the U.S. and...