Does SIC need a heart pacemaker?
Real-time gross settlement (RTGS) systems effect final settlement of payments continuously and on an individual basis. This generates a trade-off between liquidity needs and settlement delay. Against the background of reconstruction discussions, the paper analyses whether more advanced algorithms reduce liquidity needs and settlement delay if applied to the Swiss Interbank Clearing (SIC) system. Simulations run with the BoF-PSS2 simulator show that expected reductions in liquidity needs and settlement delay are modest and should carefully be evaluated against costs. More advanced settlement algorithms improve settlement efficiency only if payment release behaviour is highly aligned.
|Date of creation:||2013|
|Date of revision:|
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- Jamie McAndrews & Antoine Martin, 2007.
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165, Society for Economic Dynamics.
- Soramäki, Kimmo & Bech, Morten L. & Arnold, Jeffrey & Glass, Robert J. & Beyeler, Walter E., 2007.
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Elsevier, vol. 379(1), pages 317-333.
- Morten L. Bech & Bart Hobijn, 2006.
"Technology diffusion within central banking: the case of real-time gross settlement,"
260, Federal Reserve Bank of New York.
- Morten L. Bech & Bart Hobijn, 2007. "Technology Diffusion within Central Banking: The Case of Real-Time Gross Settlement," International Journal of Central Banking, International Journal of Central Banking, vol. 3(3), pages 147-181, September.
- Antoine Martin & James J. McAndrews, 2008. "An economic analysis of liquidity-saving mechanisms," Economic Policy Review, Federal Reserve Bank of New York, issue Sep, pages 25-39.
- Denbee, Edward & Norman, Ben, 2010. "The impact of payment splitting on liquidity requirements in RTGS," Bank of England working papers 404, Bank of England.
- Sébastien Kraenzlin & Thomas Nellen, 2010.
"Daytime Is Money,"
Journal of Money, Credit and Banking,
Blackwell Publishing, vol. 42(8), pages 1689-1702, December.
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- Angelini, Paolo, 1998. "An analysis of competitive externalities in gross settlement systems," Journal of Banking & Finance, Elsevier, vol. 22(1), pages 1-18, January.
- Ota, Tomohiro, 2011. "Intraday two-part tariff in payment systems," Bank of England working papers 428, Bank of England.
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