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Technology Diffusion within Central Banking: The Case of Real-Time Gross Settlement

  • Morten L. Bech

    (Federal Reserve Bank of New York)

  • Bart Hobijn

    (Federal Reserve Bank of New York)

We examine the diffusion of the real-time gross settlement (RTGS) technology across the world's 174 central banks. RTGS reduces settlement risk and facilitates financial innovation in, for example, the settlement of foreign exchange trades. In 1985 only three central banks had implemented RTGS systems; by year-end 2006 that number had increased to ninetythree. We find that the RTGS diffusion process is consistent with a standard S-shaped curve. Real GDP per capita, the relative price of capital, and trade patterns explain a significant part of the cross-country variation in RTGS adoption. These determinants are remarkably similar to those that seem to drive cross-country adoption patterns of other technologies.

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Article provided by International Journal of Central Banking in its journal International Journal of Central Banking.

Volume (Year): 3 (2007)
Issue (Month): 3 (September)
Pages: 147-181

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Handle: RePEc:ijc:ijcjou:y:2007:q:3:a:5
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