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.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Institut d'Économie Industrielle (IDEI), Toulouse in its series IDEI Working Papers with number 185.
Date of creation: 2003
Date of revision:
Publication status: Published in Journal of Money, Credit and Banking, vol.�38, n°7, 2006, p.�1797-1818.
Contact details of provider:
Postal: Manufacture des Tabacs, Aile Jean-Jacques Laffont, 21 Allée de Brienne, 31000 TOULOUSE
Phone: +33 (0)5 61 12 85 89
Fax: + 33 (0)5 61 12 86 37
Web page: http://www.idei.fr/
More information through EDIRC
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," CEPR Discussion Papers 3943, C.E.P.R. Discussion Papers.
- 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
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.:
- Berger, Allen N & Hancock, Diana & Marquardt, Jeffrey C, 1996.
"A Framework for Analyzing Efficiency, Risks, Costs, and Innovations in the Payments System,"
Journal of Money, Credit and Banking,
Blackwell Publishing, vol. 28(4), pages 696-732, November.
- Allen Berger & Diana Hancock & Jeffrey Marquardt, 1996. "A framework for analyzing efficiency, risks, costs and innovations in the payments system," Proceedings, Board of Governors of the Federal Reserve System (U.S.), pages 696-732.
- Angelini, P. & Giannini, C., 1993. "On the Economics of Interbank Payment Systems," Papers 193, Banca Italia - Servizio di Studi.
- Freixas, Xavier & Parigi, Bruno, 1998.
"Contagion and Efficiency in Gross and Net Interbank Payment Systems,"
Journal of Financial Intermediation,
Elsevier, vol. 7(1), pages 3-31, January.
- Xavier Freixas & Bruno Parigi, 1998. "Contagion and efficiency in gross and net interbank payment systems," Proceedings 592, Federal Reserve Bank of Chicago.
- Xavier Freixas & Bruno Parigi, 1996. "Contagion and efficiency in gross and net interbank payment systems," Economics Working Papers 176, Department of Economics and Business, Universitat Pompeu Fabra, revised Jun 1996.
- Kahn, Charles M & Roberds, William, 1998.
"Payment System Settlement and Bank Incentives,"
Review of Financial Studies,
Society for Financial Studies, vol. 11(4), pages 845-70.
- Charles M. Kahn & William Roberds, 1997. "Payment system settlement and bank incentives," Proceedings 537, Federal Reserve Bank of Chicago.
- Charles M. Kahn & William Roberds, . "Payment System Settlement and Bank Incentives," Center for Financial Institutions Working Papers 97-32, Wharton School Center for Financial Institutions, University of Pennsylvania.
- Charles M. Kahn & William Roberds, 1996. "Payment system settlement and bank incentives," Working Paper 96-10, Federal Reserve Bank of Atlanta.
- Hancock, Diana & Humphrey, David B. & Wilcox, James A., 1999. "Cost reductions in electronic payments: The roles of consolidation, economies of scale, and technical change," Journal of Banking & Finance, Elsevier, vol. 23(2-4), pages 391-421, February.
- Mirrlees, James A, 1971. "An Exploration in the Theory of Optimum Income Taxation," Review of Economic Studies, Wiley Blackwell, vol. 38(114), pages 175-208, April.
- Bagnoli, M. & Bergstrom, T., 1989.
"Log-Concave Probability And Its Applications,"
89-23, Michigan - Center for Research on Economic & Social Theory.
- Gasmi, Farid & Laffont, Jean-Jacques & Sharkey, William, 1999.
"Competition, Universal Service and Telecommunications Policy in Developing Countries,"
IDEI Working Papers
92, Institut d'Économie Industrielle (IDEI), Toulouse.
- Gasmi, F. & Laffont, J. J. & Sharkey, W. W., 2000. "Competition, universal service and telecommunications policy in developing countries," Information Economics and Policy, Elsevier, vol. 12(3), pages 221-248, September.
- Furfine, Craig H & Stehm, Jeff, 1998. "Analyzing Alternative Intraday Credit Policies in Real-Time Gross Settlement Systems," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 30(4), pages 832-48, November.
- Wilson, Robert, 1997. "Nonlinear Pricing," OUP Catalogue, Oxford University Press, number 9780195115826.
- Cornelia Holthausen & Thomas R¯nde, 2002.
"Regulating Access to International Large-Value Payment Systems,"
Review of Financial Studies,
Society for Financial Studies, vol. 15(5), pages 1561-1586.
- Holthausen, Cornelia & Rønde, Thomas, 2000. "Regulating access to international large-value payment systems," Working Paper Series 0022, European Central Bank.
- Jean-Jacques Laffont & Jean Tirole, 2001. "Competition in Telecommunications," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262621509, January.
- David Vanhoose, 2000. "Central bank policy making in competing payment systems," Atlantic Economic Journal, International Atlantic Economic Society, vol. 28(2), pages 117-139, June.
- Jean-Charles Rochet & Philippe Chone, 1998. "Ironing, Sweeping, and Multidimensional Screening," Econometrica, Econometric Society, vol. 66(4), pages 783-826, July.
- Craig, Ben & Fecht, Falko, 2011.
"Substitution between net and gross settlement systems: A concern for financial stability?,"
Discussion Paper Series 1: Economic Studies
2011,16, Deutsche Bundesbank, Research Centre.
- Ben R. Craig & Falko Fecht, 2011. "Substitution between net and gross settlement systems: A concern for financial stability?," Working Paper 1132, Federal Reserve Bank of Cleveland.
- Kari Kemppainen, 2004. "Competition and regulation in European retail payment systems," Microeconomics 0404008, EconWPA.
- Tore Nilssen, 2011.
"Risk externalities in a payments oligopoly,"
Portuguese Economic Journal,
Springer, vol. 10(3), pages 211-234, December.
- Wilko Bolt & David B. Humphrey, 2005. "Public Good Aspects of TARGET: Natural Monopoly, Scale Economies, and Cost Allocation," DNB Working Papers 036, Netherlands Central Bank, Research Department.
- Jonathan Chiu & Alexandra Lai, 2007. "Modelling Payments Systems: A Review of the Literature," Working Papers 07-28, Bank of Canada.
- Bolt, Wilko & Humphrey, David, 2005. "Public good issues in TARGET: natural monopoly, scale economies, network effects and cost allocation," Working Paper Series 0505, European Central Bank.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.