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Real-time gross settlement and the costs of immediacy Author info | Abstract | Publisher info | Download info | Related research | Statistics Charles M. Kahn
William Roberds
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Using a neoclassical monetary model, we investigate the welfare cost of a payment system that operates as a real-time gross settlement (RTGS) system. We illustrate how the cost of such systems does not ultimately derive from factors such as "payments gridlock" but instead from the credit constraints imposed by RTGS. We also investigate the welfare consequences of various approaches to the allocation of daylight credit by central banks. The two most popular approaches, collateralization and charging an administered intraday interest rate, are shown to be effective along some dimensions but flawed in others.
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Paper provided by Federal Reserve Bank of Atlanta in its series Working Paper with number
98-21.
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Date of creation: 1999Date of revision:
Publication status: Published in Journal of Monetary Economics, April 2001Handle: RePEc:fip:fedawp:98-21Contact details of provider: Postal: 1000 Peachtree St., N.E., Atlanta, Georgia 30309 Phone: 404-521-8500 Email: Web page: http://www.frbatlanta.org/ More information through EDIRC
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Keywords: Money Payment systems Other versions of this item:
This paper has been announced in the following NEP Reports :
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Charles M. Kahn & William Roberds, 1996.
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references 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.)
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155, Econometric Society.
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"Settlement risk under gross and net settlement ,"
Working Paper
99-10, Federal Reserve Bank of Atlanta.
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Charles M. Kahn & James McAndrews & William Roberds, 1999.
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Staff Reports
86, Federal Reserve Bank of New York.
[Downloadable!] Kahn, Charles M & McAndrews, James & Roberds, William, 2003.
" Settlement Risk under Gross and Net Settlement ,"
Journal of Money, Credit and Banking ,
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"Why don't consumers use electronic banking products? towards a theory of obstacles, incentives, and opportunities ,"
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Rodrigo Andrés de Souza Peñaloza, 2003.
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