Efficient Pricing of Large Value Interbank Payment Systems
AbstractThis Paper studies the efficient pricing of large-value payment systems in the presence of unobservable heterogeneity across banks. It is shown that the optimal pricing scheme for a public monopoly system involves quantity discounts in the form of a decreasing marginal fee. This is also true when the public system competes with a private system characterized by a lower marginal cost. In this case, however, optimal marginal fees in the public system are lower than its marginal cost, and fixed fees have to be levied. We also study the case of competition between several public systems. The structure of the optimal tariff depends on the willingness of Central Banks to allow by-pass.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 3943.
Date of creation: Jun 2003
Date of revision:
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Other versions of this item:
- Holthausen, Cornelia & Rochet, Jean-Charles, 2006. "Efficient Pricing of Large Value Interbank Payment Systems," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 38(7), pages 1797-1818, October.
- Holthausen, Cornelia & Rochet, Jean-Charles, 2003. "Efficient Pricing of Large Value Interbank Payment Systems," IDEI Working Papers 185, Institut d'Économie Industrielle (IDEI), Toulouse.
- Holthausen, Cornelia & Rochet, Jean-Charles, 2002. "Efficient pricing of large value interbank payment systems," Working Paper Series 0184, European Central Bank.
- E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
- G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
This paper has been announced in the following NEP Reports:
- NEP-CFN-2003-07-13 (Corporate Finance)
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