Document Type

Thesis - Open Access

Award Date


Degree Name

Master of Science (MS)



First Advisor

Charles E. Lamberton


There are a number of payments systems in the U.S. These include Fedwire, Clearing House Interbank Payments System (CHIPS) and Automated Clearing House (ACH). Although the Federal Reserve administers only Fedwire and ACH, it might also have to rescue CHIPS as a creditor of last resort. There have been concerns that some of the procedures adopted by these payments systems could impose risks on the systems. The first concern is the credit risk that these systems assume by allowing receivers to get funds immediately while senders can settle the net differences until the end of the day at no cost of these daylight overdrafts. The second concern is the system risk that these systems assume by guaranteeing transactions if a sender does not have enough reserves to cover its balance at the end of the day. Furthermore, the increased linkages of international markets and increased access by nonbank firms to the systems also raised concerns about their risks to these payments systems. Lesser Developed Countries' Debts Since 1970, U.S. banks have been playing a major role in LDCs lending. However, due to world recession and disinflation of the early 1980’s, many LDCs have been having difficulty servicing their debts. Today, the fundamental question is how these loans are going to be paid back in the long run and how is the loss going to be shared among the lenders (U. S. bank stockholders), guarantors (U.S. taxpayers), and borrowers (LDC citizens). The purpose of this research is to investigate problems of the U.S. banking system and evaluate various reform proposals. The specific objectives of this research are: 1. To review four fundamental factors that shape today's U.S. banking structure. These factors are bank chartering, branching, merging and group banking. 2. To examine the deposit insurance system and its shortcomings; review the effects of deregulation on the system; and evaluate proposals for reform. 3. To evaluate and compare opinions on the reform of the linkages of banking to other financial activities and nonbank firms. 4. To identify the various risks that the payments systems impose on the Federal Reserve System. 5. To examine the causes of LDC loan problems, and solutions that have been pursued. 6. To analyze the banking facilities and examine the financial standing of banks in South Dakota.

Library of Congress Subject Headings

Banks and banking -- South Dakota

Deposit insurance -- Law and legislation



Number of Pages



South Dakota State University