Liquidity Saving Mechanisms in Payment Systems and Settlement Liquidity

Analyzing the Economics of Financial Market Infrastructures - Advances in Finance, Accounting, and Economics ◽

10.4018/978-1-4666-8745-5.ch012 ◽

2016 ◽

pp. 225-249

Author(s):

Masashi Nakajima

Keyword(s):

Real Time ◽

Financial Market ◽

Hybrid System ◽

Waiting Time ◽

Evolutionary Process ◽

Payment Systems ◽

Bank Of Japan ◽

Saving Effect ◽

The Impact ◽

Remarkable Progress

Payment systems are one of the key Financial Market Infrastructures (FMIs) and have showed remarkable progress over the past two decades. The first half of this chapter focuses on the evolutionary process of payment systems, starting with the Deferred Net Settlement (DNS) system and progressing to the Real-Time Gross Settlement (RTGS) system. Subsequently, much more sophisticated payment systems have been put in place, which include the “Hybrid System,” and the “RTGS system with Liquidity Saving Mechanism (LSM).” In the latter half of this chapter, experience from the “Next-Generation Real-Time Gross Settlement” (RTGS-XG) project of BOJ-NET is discussed. BOJ-NET is the large-value payment system operated by Bank of Japan (BOJ). BOJ-NET added an LSM in 2008 and became an RTGS system with LSM. The impact of the LSM's introduction is analyzed, which includes the liquidity-saving effect, the average waiting time in the queue, the turnover ratio, and the volume of idle liquidity.

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Liquidity Saving Mechanisms in Payment Systems and Settlement Liquidity

International Journal of Innovation in the Digital Economy ◽

10.4018/ijide.2016100102 ◽

2016 ◽

Vol 7 (4) ◽

pp. 23-45

Author(s):

Masashi Nakajima

Keyword(s):

Real Time ◽

Evolutionary Process ◽

Payment System ◽

Payment Systems ◽

The Past ◽

Turnover Ratio ◽

Saving Effect ◽

The Impact ◽

Settlement Time ◽

Remarkable Progress

Payment systems are one of the key Financial Market Infrastructures (FMIs) and have showed remarkable progress over the past two decades. The first half of this paper focuses on the evolutionary process of payment systems, starting with the Deferred Net Settlement (DNS) system and progressing to the Real-Time Gross Settlement (RTGS) system. Subsequently, much more sophisticated payment systems have been put in place, which include the “Hybrid System,” and the “RTGS system with Liquidity Saving Mechanism (LSM).” In the latter half of this paper, experience from the “Next-Generation Real-Time Gross Settlement” (RTGS-XG) project of BOJ-NET is discussed. BOJ-NET is the large-value payment system operated by Bank of Japan (BOJ). BOJ-NET, a pure RTGS system, added an LSM in 2008 and became an RTGS system with LSM. The impact of the LSM's introduction is analyzed, which includes the participants' settlement liquidity, the liquidity-saving effect, the average settlement time, the average waiting time in the queue, the turnover ratio, and the volume of idle liquidity. These analyses would be useful for any nations considering the introduction of the same kind of enhanced payment system.

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The impact of mobile real-time bus arrival information on passenger's waiting time perception and travel experience

10.5353/th_991044201198603414 ◽

2019 ◽

Author(s):

On Yu Cheng

Keyword(s):

Real Time ◽

Time Perception ◽

Waiting Time ◽

Travel Experience ◽

The Impact

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Global Trends of Payment Systems and the Next-Generation RTGS Project in Japan

Cyberlaw for Global E-business - Advances in E-Business Research ◽

10.4018/978-1-59904-828-4.ch006 ◽

2011 ◽

pp. 109-127 ◽

Cited By ~ 3

Author(s):

Masaaki Nakajima

Keyword(s):

Hybrid Systems ◽

Structural Changes ◽

Early Stage ◽

Evolutionary Process ◽

Integrated Systems ◽

Next Generation ◽

Payment Systems ◽

Global Trends ◽

Global Trend ◽

Bank Of Japan

This chapter investigates the evolutionary process of the payment system against the background of structural changes. At the early stage, most payment systems were Designated-Time Net Settlement (DTNS) systems. Then, Real-Time Gross Settlement (RTGS) systems were introduced, which had the merit of reducing settlement risks. This first trend was followed by the deployment of Hybrid systems and Integrated systems. The Bank of Japan (BOJ) is proceeding with the Next-Generation RTGS (RTGS-XG) project. This project is regarded as a typical enhancement of payment systems following the global trend. The features and benefits of the RTGS-XG are closely analyzed.

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Intraday Liquidity Flows within the Financial Market Infrastructures in Mexico

Analyzing the Economics of Financial Market Infrastructures - Advances in Finance, Accounting, and Economics ◽

10.4018/978-1-4666-8745-5.ch010 ◽

2016 ◽

pp. 191-207

Author(s):

Biliana Alexandrova-Kabadjova ◽

Liliana Garcia-Ochoa ◽

Ronald Heijmans ◽

Antoaneta Serguieva

Keyword(s):

Central Bank ◽

Financial Market ◽

Payment System ◽

Payment Systems ◽

Transaction Data ◽

Liquidity Provision ◽

Flow Of Funds ◽

External Funds ◽

Intraday Liquidity ◽

The Impact

In this chapter, the authors present a methodology to study the flow of funds in large-value payment systems (LVPSs). The algorithm presented differentiates the flow of payments into two categories: 1) external funds, i.e. funds transferred from other financial market infrastructures (FMIs) or provided by the central bank, and 2) the reuse of incoming payments within the same FMI. Using individual transaction data, the algorithm evaluates to what extent incoming payments are used to cover obligations. The method also studies the flow of intraday liquidity under the framework of its provision within Mexican FMIs. The aim is to evaluate the impact of intraday liquidity provision, and understand how liquidity is transmitted to participants in the Mexican Large Value Payment System, or SPEI®.

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Part IV UK Payment and Settlement, 12 UK Payment Systems

Financial Markets and Exchanges Law ◽

10.1093/law/9780198827528.003.0012 ◽

2021 ◽

Author(s):

Rogers Jonathan

Keyword(s):

Real Time ◽

Market Economy ◽

Financial Market ◽

Financial Institutions ◽

Global Economy ◽

Payment Systems ◽

Future Developments ◽

Payments Systems ◽

Efficient Processing ◽

The Uk

This chapter looks at the main provisions of the Banking Act and the 2013 Act, as well as the actions taken by the regulators under these Acts in the present time and in future developments. It discusses payments systems as an essential part of any modern financial market economy that enables the fast and efficient processing of transactions. It also describes the increase in the turnover of payment systems and digitization of the UK economy that made financial institutions and regulators recognize the central importance of payment systems in supporting a technologically enabled global economy. This chapter talks about regulators that are focused both on real time supervision and the modernization and development of the UK's payment systems. It mentions CREST as one of the eight payment systems that are currently recognised by the Treasury.

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Global Trends of Payment Systems and the Next-Generation RTGS Project in Japan

Electronic Business ◽

10.4018/978-1-60566-056-1.ch152 ◽

2009 ◽

pp. 2495-2513 ◽

Cited By ~ 1

Author(s):

Masaki Nakajima

Keyword(s):

Hybrid Systems ◽

Structural Changes ◽

Early Stage ◽

Evolutionary Process ◽

Integrated Systems ◽

Next Generation ◽

Payment Systems ◽

Global Trends ◽

Global Trend ◽

Bank Of Japan

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The impact of real-time information on passengers’ value of bus waiting time

Transportation Research Procedia ◽

10.1016/j.trpro.2018.09.043 ◽

2018 ◽

Vol 31 ◽

pp. 18-34 ◽

Cited By ~ 6

Author(s):

Hui Lu ◽

Peter Burge ◽

Chris Heywood ◽

Rob Sheldon ◽

Peter Lee ◽

...

Keyword(s):

Real Time ◽

Waiting Time ◽

Real Time Information ◽

The Impact ◽

Time Information

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Measuring the Impact of a Failing Participant in Payment Systems

IMF Working Papers ◽

10.5089/9781513545080.001 ◽

2020 ◽

Vol 20 (81) ◽

Author(s):

Ronald Heijmans ◽

Froukelien Wendt

Keyword(s):

Crisis Management ◽

Financial Market ◽

Financial Stability ◽

Payment System ◽

Risk Indicator ◽

Payment Systems ◽

Composite Risk ◽

System Access ◽

The Impact ◽

Central Securities Depositories

Banks and financial market infrastructures (FMIs) that are not able to fulfill their payment obligations can be a source of financial instability. This paper develops a composite risk indicator to evaluate the criticality of participants in a large value payment system network, combining liquidity risk and interconnections in one approach, and applying this to the TARGET2 payment system. Findings suggest that the most critical participants in TARGET2 are other payment systems, because of the size of underlying payment flows. Some banks may be critical, but this is mainly due to their interconnectedness with other TARGET2 participants. Central counterparties and central securities depositories are less critical. These findings can be used in financial stability analysis, and feed into central bank policies on payment system access, oversight, and crisis management.

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