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SIC: Switzerland's new electronic interbank payment system

Author

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  • Christian Vital
  • David L. Mengle

Abstract

It is an article of faith among American bankers and their regulators that some daylight overdrafts are necessary to the efficient functioning of large-dollar wire transfer systems. But the Swiss have injected an element of doubt by developing a system that does away with daylight overdrafts. Their new system processes a payment only if sufficient clearing funds are on deposit in the sending bank’s reserve account. If sufficient funds are not available, the payment is held in a queue until covering funds have arrived. Vital and Mengle describe the first eighteen months of the system’s operation.

Suggested Citation

  • Christian Vital & David L. Mengle, 1988. "SIC: Switzerland's new electronic interbank payment system," Economic Review, Federal Reserve Bank of Richmond, issue Nov, pages 12-27.
  • Handle: RePEc:fip:fedrer:y:1988:i:nov:p:12-27:n:v.74no.6
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    File URL: https://fraser.stlouisfed.org/files/docs/publications/frbrichreview/rev_frbrich198811.pdf
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    References listed on IDEAS

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    1. Terrence M. Belton & Matthew D. Gelfand & David B. Humphrey & Jeffrey C. Marquardt, 1987. "Daylight overdrafts and payments system risk," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), issue Nov, pages 839-852.
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    Cited by:

    1. Dueker, Michael & Fischer, Andreas M., 1996. "Inflation targeting in a small open economy: Empirical results for Switzerland," Journal of Monetary Economics, Elsevier, vol. 37(1), pages 89-103, February.

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    Keywords

    Payment systems ; Overdrafts;

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