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Tiering in CHAPS

Author

Listed:
  • Kevin Finan

    (Bank of England)

  • Ana Lasaosa

    (Bank of England)

  • Jamie Sunderland

    (Bank of England)

Abstract

In the United Kingdom, many banks access payment systems via relationships with other banks. This introduces risks to financial stability which can be reduced by increasing direct participation. The Bank has worked with the payments industry to increase direct participation in CHAPS, as part of its broader work to reduce systemic risk in the United Kingdom. As a consequence, by 2015 a number of banks that are systemically important to the CHAPS system will become direct participants. This is a structural change which will significantly reduce interbank exposures, and hence will enhance UK financial stability.

Suggested Citation

  • Kevin Finan & Ana Lasaosa & Jamie Sunderland, 2013. "Tiering in CHAPS," Bank of England Quarterly Bulletin, Bank of England, vol. 53(4), pages 371-378.
    • Handle: RePEc:boe:qbullt:0124
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    References listed on IDEAS

    as
    1. Andrew Dent & Will Dison, 2012. "The Bank of England’s Real-Time Gross Settlement infrastructure," Bank of England Quarterly Bulletin, Bank of England, vol. 52(3), pages 234-243.
    2. International Monetary Fund, 2011. "United Kingdom: Observance by CHAPS of CPSS Core Principles for Systemically Important Payment Systems Detailed Assessment of Observance," IMF Staff Country Reports 2011/237, International Monetary Fund.
    3. Christopher Becher & Stephen Millard & Kimmo SoramÃÂäki, 2008. "The network topology of CHAPS Sterling," Bank of England working papers 355, Bank of England.
    4. International Monetary Fund, 2011. "Guernsey: Financial Sector Assessment Program Update-Detailed Assessment of Observance on Insurance Core Principles," IMF Staff Country Reports 2011/002, International Monetary Fund.
    5. John P. Jackson & Mark J. Manning, 2007. "Central Bank intraday collateral policy and implications for tiering in rtgs payment systems," DNB Working Papers 129, Netherlands Central Bank, Research Department.
    6. Ana Lasaosa & Merxe Tudela, 2008. "Risks and efficiency gains of a tiered structure in large-value payments: a simulation approach," Bank of England working papers 337, Bank of England.
    7. International Monetary Fund, 2011. "United Kingdom: Insurance Core Principles Detailed Assessment of Observance," IMF Staff Country Reports 2011/234, International Monetary Fund.
    8. Christopher Jackson & Mathew Sim, 2013. "Recent developments in the sterling overnight money market," Bank of England Quarterly Bulletin, Bank of England, vol. 53(3), pages 223-233.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Edward Denbee & Rodney Garratt & Peter Zimmerman, 2014. "Variations in liquidity provision in real-time payment systems," Bank of England working papers 513, Bank of England.
    2. Jan Paulick & Ron Berndsen & Martin Diehl & Ronald Heijmans, 2024. "No more tears without tiers? The impact of indirect settlement on liquidity use in TARGET2," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 51(2), pages 425-458, May.
    3. Robleh Ali & John Barrdear & Roger Clews & James Southgate, 2014. "Innovations in payment technologies and the emergence of digital currencies," Bank of England Quarterly Bulletin, Bank of England, vol. 54(3), pages 262-275.
    4. Evangelos Benos & Gerardo Ferrara & Pedro Gurrola-Perez, 2017. "The impact of de-tiering in the United Kingdom’s large-value payment system," Bank of England working papers 676, Bank of England.
    5. Zijun Liu & Stephanie Quiet & Benedict Roth, 2015. "Banking sector interconnectedness: what is it, how can we measure it and why does it matter?," Bank of England Quarterly Bulletin, Bank of England, vol. 55(2), pages 130-138.
    6. Nick Davey & Daniel Gray, 2014. "How has the Liquidity Saving Mechanism reduced banks’ intraday liquidity costs in CHAPS?," Bank of England Quarterly Bulletin, Bank of England, vol. 54(2), pages 180-189.
    7. Carlos A. Arango & Freddy H. Cepeda, 2016. "Non-monotonic Tradeoffs of Tiering in a Large Value Payment System," Borradores de Economia 946, Banco de la Republica de Colombia.
    8. David Bholat, 2015. "Big data and central banks," Bank of England Quarterly Bulletin, Bank of England, vol. 55(1), pages 86-93.

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