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Wholesale Payments and Financial Discipline, Efficiency, and Liquidity

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  • Mr. D. F. I. Folkerts-Landau

Abstract

Properly designed wholesale payments system can make a significant contribution to enhancing market discipline in the financial sector, reducing the risk of systemic disturbance and permitting a less extensive safety net for financial institutions. The objective of these reforms has been to achieve a reduction of the credit risk associated with the growth in intraday credit exposures that arises in net settlement systems and in real-time gross systems when the central bank provides daylight overdrafts. Intraday payments-related credit in net settlement systems has been reduced by restructuring payment systems into real-time gross settlement systems with collateralized overdrafts, while in the existing real-time gross settlement systems, the risk-abatement program currently in effect has taken the form of caps and charges on uncollateralized daylight credit.

Suggested Citation

  • Mr. D. F. I. Folkerts-Landau, 1997. "Wholesale Payments and Financial Discipline, Efficiency, and Liquidity," IMF Working Papers 1997/154, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:1997/154
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    Citations

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    Cited by:

    1. Koponen, Risto & Soramäki, Kimmo, 1998. "Intraday liquidity needs in a modern interbank payment system : A simulation approach," Scientific Monographs, Bank of Finland, number 1998_014.
    2. Selgin, George, 2004. "Wholesale payments: questioning the market-failure hypothesis," International Review of Law and Economics, Elsevier, vol. 24(3), pages 333-350, September.
    3. Walter Orellana Rocha & Gonzalo Forgues Puccio, 2001. "Algunas consideraciones sobre el Sistema de Pagos en Bolivia," Revista de Análisis del BCB, Banco Central de Bolivia, vol. 4(2), pages 57-98, December.
    4. Koponen, Risto & Soramäki, Kimmo, 1998. "Intraday liquidity needs in a modern interbank payment system: A simulation approach," Bank of Finland Scientific Monographs, Bank of Finland, volume 0, number sm1998_014, March.
    5. repec:zbw:bofism:1998_014 is not listed on IDEAS
    6. repec:zbw:bofrdp:2003_016 is not listed on IDEAS
    7. Kari Kemppainen, 2004. "Competition and regulation in European retail payment systems," Microeconomics 0404008, University Library of Munich, Germany.
    8. Kemppainen, Kari, 2003. "Competition and regulation in European retail payment systems," Research Discussion Papers 16/2003, Bank of Finland.

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