Regulation of International Large Value Payment Systems
This paper studies access regulation to international large-value payment systems when banking supervision is a national task. We focus on the choice between allowing net settlement or imposing real-time gross settlement. As a novel feature, the communication between the supervisors is endogenized. It is shown that the national supervisors' incentives are not perfectly aligned when deciding upon the settlement method. As a result, systemic risk is excessive under public regulation. Still, leaving access regulation to the private banks can only be optimal if they have superior information about the risk of their foreign counterparty in the settlement system.
|Date of creation:||01 Aug 2000|
|Date of revision:|
|Contact details of provider:|| Phone: 1 212 998 3820|
Fax: 1 212 995 4487
Web page: http://www.econometricsociety.org/pastmeetings.asp
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Crawford, Vincent P & Sobel, Joel, 1982.
"Strategic Information Transmission,"
Econometric Society, vol. 50(6), pages 1431-51, November.
- Giannini,C. & Monticelli,C., 1995. "Which Target for Monetary Policy in Stage Three? Issues in the Shaping of the European Payment System," Papers 257, Banca Italia - Servizio di Studi.
- Rochet, Jean-Charles & Tirole, Jean, 1996.
"Controlling Risk in Payment Systems,"
Journal of Money, Credit and Banking,
Blackwell Publishing, vol. 28(4), pages 832-62, November.
- de Bandt, Olivier & Hartmann, Philipp, 2000.
"Systemic Risk: A Survey,"
CEPR Discussion Papers
2634, C.E.P.R. Discussion Papers.
- Bruce J. Summers, 1991. "Clearing and payment systems: the role of the central bank," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), issue Feb, pages 81-91.
- Stein, Jeremy C, 1989. "Cheap Talk and the Fed: A Theory of Imprecise Policy Announcements," American Economic Review, American Economic Association, vol. 79(1), pages 32-42, March.
- Nahum D. Melumad & Toshiyuki Shibano, 1991. "Communication in Settings with No. Transfers," RAND Journal of Economics, The RAND Corporation, vol. 22(2), pages 173-198, Summer.
When requesting a correction, please mention this item's handle: RePEc:ecm:wc2000:1531. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christopher F. Baum)
If references are entirely missing, you can add them using this form.