Wholesale Payments and Financial Discipline, Efficiency, and Liquidity
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Summary:
Properly designed wholesale payments system can make a significant contribution to enhancing market discipline in the financial sector, reducing the risk of systemic disturbance and permitting a less extensive safety net for financial institutions. The objective of these reforms has been to achieve a reduction of the credit risk associated with the growth in intraday credit exposures that arises in net settlement systems and in real-time gross systems when the central bank provides daylight overdrafts. Intraday payments-related credit in net settlement systems has been reduced by restructuring payment systems into real-time gross settlement systems with collateralized overdrafts, while in the existing real-time gross settlement systems, the risk-abatement program currently in effect has taken the form of caps and charges on uncollateralized daylight credit.
Series:
Working Paper No. 1997/154
Subject:
Asset and liability management Banking Financial institutions Financial markets Government securities Liquidity Payment systems Real time gross settlement systems Securities
English
Publication Date:
November 1, 1997
ISBN/ISSN:
9781451857191/1018-5941
Stock No:
WPIEA1541997
Pages:
27
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