Estimating Settlement Risk and the Potential for Contagion in Canada's Automated Clearing Settlement System
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|Length:||51 pages Abstract: Payments systems operate virtually unnoticed in our daily lives and yet are crucial to a wellfunctioning economy and financial system. Because they explicitly link financial institutions, payments systems provide a way to transmit risk within, and between, financial systems. Ideally, payments systems should be designed and operated so as not to add risk in the event of a crisis. The author examines the potential for contagion through linkages arising from the interaction of financial institutions in a Canadian payments system, the Automated Clearing Settlement System (ACSS). A method of measuring risk in the system, given its unique design, is developed and used to estimate contagion over a wide range of conditions. The author finds, first and foremost, that the ACSS has only a limited capacity, if any, to facilitate contagion in the current environment.|
|Date of creation:||2002|
|Date of revision:|
|Contact details of provider:|| Postal: 234 Wellington Street, Ottawa, Ontario, K1A 0G9, Canada|
Phone: 613 782-8845
Fax: 613 782-8874
Web page: http://www.bank-banque-canada.ca/
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