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Technology Diffusion within Central Banking: The Case of Real-Time Gross Settlement

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Author Info
Morten L. Bech (Federal Reserve Bank of New York)
Bart Hobijn (Federal Reserve Bank of New York)

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Abstract

We examine the diffusion of the real-time gross settlement (RTGS) technology across the world's 174 central banks. RTGS reduces settlement risk and facilitates financial innovation in, for example, the settlement of foreign exchange trades. In 1985 only three central banks had implemented RTGS systems; by year-end 2006 that number had increased to ninetythree. We find that the RTGS diffusion process is consistent with a standard S-shaped curve. Real GDP per capita, the relative price of capital, and trade patterns explain a significant part of the cross-country variation in RTGS adoption. These determinants are remarkably similar to those that seem to drive cross-country adoption patterns of other technologies.

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Publisher Info
Article provided by International Journal of Central Banking in its journal International Journal of Central Banking.

Volume (Year): 3 (2007)
Issue (Month): 3 (September)
Pages: 147-181
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Handle: RePEc:ijc:ijcjou:y:2007:q:3:a:5

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Find related papers by JEL classification:
C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Gara M. Afonso & Hyun Song Shin, 2008. "Systemic risk and liquidity in payment systems," Staff Reports 352, Federal Reserve Bank of New York. [Downloadable!]
  2. Morten L. Bech, 2008. "Intraday liquidity management: a tale of games banks play," Economic Policy Review, Federal Reserve Bank of New York, issue Sep, pages 7-23. [Downloadable!]
  3. Enghin Atalay & Antoine Martin & James McAndrews, 2008. "The welfare effects of a liquidity-saving mechanism," Staff Reports 331, Federal Reserve Bank of New York. [Downloadable!]
  4. Todd Keister & Antoine Martin & James McAndrews, 2008. "Divorcing money from monetary policy," Economic Policy Review, Federal Reserve Bank of New York, issue Sep, pages 41-56. [Downloadable!]
  5. Diego Comin & Bart Hobijn & Emilie Rovito, 2008. "Technology usage lags," Journal of Economic Growth, Springer, vol. 13(4), pages 237-256, December. [Downloadable!] (restricted)
  6. Antoine Martin & James McAndrews, 2008. "A study of competing designs for a liquidity-saving mechanism," Staff Reports 336, Federal Reserve Bank of New York. [Downloadable!]
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