Managing Payment System Risk During the Transition From a Centrally Planned to a Market Economy

November 1, 1992

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Format: Chicago

Andrew T. Hook Managing Payment System Risk During the Transition From a Centrally Planned to a Market Economy, (USA: International Monetary Fund, 1992) accessed December 26, 2024

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

The objectives and functions of payments systems in centrally planned economies are described and analyzed. These are compared to those of payments systems in market economies and to the characteristics of an ideal payments system. The dominant role of the state in the centrally planned economies meant that the state underwrote virtually all payments risk. With the withdrawal of the state, however, participants became exposed to credit, liquidity, and operational risks. In the transition, the central bank has a key role to play in payments systems. Areas where rapid improvements are possible are: accounting, clearing, settlement, netting and standardization.

Subject: Banking, Commercial banks, Credit, Credit risk, Economic sectors, Financial institutions, Financial markets, Financial regulation and supervision, Financial sector, Money, Payment systems

Keywords: Clearing house, Commercial banks, Credit, Credit risk, Financial sector, Managing payment risk, Payment advice, Payment anomaly, Payment habit, Payment information, Payment instruction, Payment obligation, Payment systems, Payment transaction, Payments area, Payments policy, Payments regulation, Payments transmission, State bank, WP

Publication Details

Pages:

49
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 1992/095
Stock No:

WPIEA0951992
ISBN:

9781451851762
ISSN:

1018-5941

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