The Federal Reserve Bank of Chicago submitted a public comment on the Board of Governors' Consultation Paper on Intraday Liquidity Management and Payment System Risk Policy (Docket No. OP-1257) on March 15, 2007. The Consultation Paper noted that banks frequently delay the release of large-value Fedwire payments until late in the day, raising operational and systemic risk concerns. The Bank's comment focused upon reports that Fedwire payments associated with the settlement of exchange-traded derivatives contracts, which are both systemically important and time-sensitive, have been routinely delayed. In preparing the comment, Bank staff analyzed confidential settlements data and was able to corroborate for the first time in a systematic way anecdotal reports of delay. The comment letter pointed out that late-in-the-day bunching of settlement payments could have adverse consequences during periods of financial turmoil, an additional reason for the Board's expressed policy concerns. To address these concerns, the Bank endorsed changes to the Federal Reserve's Payments System Risk policy that would result in the reduction or elimination of daylight overdraft charges for fully collateralized overdrafts. Then-President Moskow submitted the comment letter on behalf of the Bank, together with a staff commentary prepared by Carol Clark, David Marshall and Robert Steigerwald from the Financial Markets Group. Nicholas Buchholz and Victor Lubasi provided valuable assistance in the preparation of the letter.