transfer system. Abankwhichhadnotyetreceived sufficient fundstransfers fromotherbanksmightfinditselfunabletoeffectthefundstransfer requests ofitscustomers. Inparticular, bankswhichhadborrowed funds overnight mightfindthattheyhadreached theirnet-debit capsimplyby returning theborrowed fundsthenextmorning. Inordertoreducethis possibility happening tothem,banksmightdelaysending fundstransfer instructions tootherbanksuntillateintheday,thereby generally slowing theentirefundstransfer systemandthreatening traffic jamsattheendof theday. (iii)Guaranteed finality ofhonourbyreceiving bank 35.Finality ofhonourtothetransferee isassured oncetheinter-bank transfer through correspondent banks(either two-bank fundstransfers or three··bank fundstransfers asinFedwire) iscompleted sincethetransferee bankautomatically hasvalue. Finality ofhonourtothetransferee isassured inanetsettlement networkifthereceiving bankisobligated tocreditits creditpartywhether ornotitreceives settlement, asiscurrently therule inCashWire andCHESS. 36.Guaranteed finality ofhonourbythereceiving bankinsulates the non-banking sectoroftheeconomy fromtheeffectofafailure tosettle, thus protecting financial markets andthegeneral economy. Itcouldbeexpected thatreceiving bankswouldautomatically limittheirexposure tosending banks whichtheyconsidered doubtful bylowering thebilateral netcreditlimitthey hadestablished. Ontheotherhandithasbeensuggested thatguaranteed finality mightcausereceivins hankstoincrease feestocompensate themselves forbearing theincreased riskandwouldleadtoareduction inthe willingness ofbankstoreceive funds t~ansfers.A/CN.9/266/Add.l EnSlish rase36 (iv)Central bankguarantee ofdebitpositions 37.One means ofreducin& system-risk whichhasbeencarefully avoided to dateisfortheFederal Reserve andotherbankio& authorities to&uarantee the obli&ations ofparticipants inthesystembeyondthatalready available for smalldeposits. Therecentclosin& ofa number ofsmallandmedium-sized banksandtherescueofalar&ebankbythebankin& authorities havecaused thoseauthorities tosearchforothermeanstoreducesystem-risk. (v)Insurance toguarantee debitbalances 38.The&uarantee ofthedebitbalances arisin& insettlement networks could alsobecovered by apublicorprivate insurance fund.similar tothe insurance fundscoverin& smalldeposits inbanksandotherdeposit takins institutions. Oneestimate whichhasbeenmadeisthatthepremium costwould approximate $1.90permillion dollars infundstransfers.• • J •
**Analysis**
The text appears to be discussing the mechanics and risks of interbank transactions, particularly in the context of the Federal Reserve and other banking authorities. It touches on the concepts of system risk, finality of honor, and guarantees for debit balances. Given the focus on banking and financial transactions, it is likely that the text is related to the field of economics.

**Category**
Industry, Finance