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 about banks' future payment volumes. 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 provate system characterized by a lower marginal cost. However in this case, 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 willigness of Central Banks to allow by-pass. JEL Classification: G28, E58, D42, D43
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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.
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- 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
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