The Reform of Wholesale Payment Systems and its Impacton Financial Markets

ByDirk Schoenmaker, Peter M. Garber, D. F. I. Folkerts-Landau

May 1, 1996

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper reviews the ongoing efforts to reduce the risks inherent in the world’s principal wholesale payment systems. The paper assesses the major policy proposals to contain the growth in intraday credit exposures that arises in net settlement wholesale payment systems and in the real-time gross systems in which the central bank provides daylight overdrafts. It also discusses the benefits of these risk-management policies, and we assess the adverse impact of applying interest charges for intraday central-bank credit or of collateralizing such credit on liquidity in financial markets.

Subject: Banking, Collateral, Financial institutions, Financial markets, Government securities, Payment systems, Real time gross settlement systems, Securities

Keywords: Collateral, Europe, Global, government securities, money market, opportunity cost, payment flow, payment pattern, payment system, payment system charge, payment system liquidity, Payment systems, payment traffic, payments problem, Real time gross settlement systems, RTGS payment system, Securities, securities transaction, settlement system, system liquidity, treasury securities, WP

Pages:
54
Volume:
1996
DOI:
https://doi.org/10.5089/9781451845525.001
Issue:
037
Series:
Working Paper No. 1996/037
Stock No:
WPIEA0371996
ISBN:
9781451845525
ISSN:
1018-5941

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Notes

This paper is forthcoming as a G-30 Discussion Paper.

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