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

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  • Morten L. Bech

    (Federal Reserve Bank of New York)

  • Bart Hobijn

    (Federal Reserve Bank of New York)

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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Bibliographic 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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Cited by:
  1. 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.
  2. Gara M. Afonso & Hyun Song Shin, 2008. "Systemic risk and liquidity in payment systems," Staff Reports 352, Federal Reserve Bank of New York.
  3. repec:fip:fedhep:y:2013:i:qii:p:30-46:n:vol.37no.2 is not listed on IDEAS
  4. Bech, Morten L. & Chapman, James T.E. & Garratt, Rodney J., 2010. "Which bank is the "central" bank?," Journal of Monetary Economics, Elsevier, vol. 57(3), pages 352-363, April.
  5. Antoine Martin & James McAndrews, 2008. "A study of competing designs for a liquidity-saving mechanism," Staff Reports 336, Federal Reserve Bank of New York.
  6. David Marshall & Robert Steigerwald, 2013. "The role of time-critical liquidity in financial markets," Economic Perspectives, Federal Reserve Bank of Chicago, issue Q II, pages 30-46.
  7. Robert Oleschak & Thomas Nellen, 2013. "Does SIC need a heart pacemaker?," Working Papers 2013-10, Swiss National Bank.
  8. John Goddard & Donal McKillop & John Wilson, 2009. "Which Credit Unions are Acquired?," Journal of Financial Services Research, Springer, vol. 36(2), pages 231-252, December.
  9. Morten L. Bech & Antoine Martin & James McAndrews, 2012. "Settlement liquidity and monetary policy implementation—lessons from the financial crisis," Economic Policy Review, Federal Reserve Bank of New York, issue Mar, pages 3-20.
  10. Diego Comin & Bart Hobijn & Emilie Rovito, 2008. "Technology usage lags," Journal of Economic Growth, Springer, vol. 13(4), pages 237-256, December.
  11. 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.
  12. Enghin Atalay & Antoine Martin & James McAndrews, 2008. "The welfare effects of a liquidity-saving mechanism," Staff Reports 331, Federal Reserve Bank of New York.
  13. Stephen Quinn & William Roberds, 2012. "Responding to a shadow banking crisis: the lessons of 1763," Working Paper 2012-08, Federal Reserve Bank of Atlanta.

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