scholarly journals Measuring the Impact of a Failing Participant in Payment Systems

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.

Intraday Liquidity Flows within the Financial Market Infrastructures in Mexico

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®.

scholarly journals QUARTERLY ANALYSIS: The Progress of Monetary, Banking and Payment System Quarter IV - 2011

2012 ◽  
Vol 14 (3) ◽  
pp. 221-223
Author(s):  
Author Team of Quarterly Report Bank Indonesia
Keyword(s):  
Economic Performance ◽  
Financial Stability ◽  
Payment System ◽  
The Impact

The Board of Governor Meeting of Bank Indonesia today decided to maintain the BI rate at the level of 6.0%. This decision is based on thoroughly examination on the recent economic performance, several recent risks, and the prospect of the economy. The Board of Governor view the level of BI rate is consistent with the targeted inflation ahead, and is conducive to maintain the financial stability, and also to mitigate the impact of global prospect on Indonesian economy.

A Study of the Impact of Crypto Currency on the Indian Payment system

2021 ◽  
pp. 310-316
Author(s):  
Abhishek Kumar
Keyword(s):  
Financial Stability ◽  
Technological Development ◽  
Payment System ◽  
Payment Methods ◽  
Smooth Flow ◽  
Payments System ◽  
The People ◽  
The Face ◽  
Pricing Factors ◽  
The Impact

Payment systems form an integral part of any emerging economy. A payment system should be safe, secure, reliable, and accessible. It will help in expanding financial inclusion and bringing financial stability. An efficient payment system helps in the smooth flow of payments and mitigation of risks and smooth functioning of the economy. It helps in fostering confidence in individuals about the use of payment services. Technological development has helped in changing the face of payments system from cards (credit/debit card) to wallets (Paytm/Phonepe etc.) to Unified Payments Interface (UPI) and Quick Response (QR)codes. It has not only introduced us to new payment methods but also strengthen the traditional payment methods. It has become an important part of our daily life. It has empowered us and made our life easier by offering services at our fingertips round the clock. The latest addition to these is cryptocurrencies like Bitcoin, Ether, Ripple, etc. Cryptocurrencies are one of the first applications of Blockchain technologies.it has removed the need for intermediaries and exert pressure on the existing framework. The attributes of cryptocurrency framework like decentralized network, no intermediaries, and the lack of stable pricing factors do not let it unlock its true potential. The future of Cryptocurrency is uncertain. Whether it will be accepted globally or still be traded via unauthorized means. Every problem allows for finding a solution. The regulators should come up with policies, which will help in shaping the payments system for the betterment of the people, by using the positive attributes of cryptocurrencies and coordinating with the Global peers.

Simulation Approaches to Risk, Efficiency, and Liquidity Usage in Payment Systems

2013 ◽  
pp. 69-83 ◽  
Author(s):  
Tatu Laine ◽  
Kasperi Korpinen ◽  
Matti Hellqvist
Keyword(s):  
Financial Stability ◽  
Global Financial Crisis ◽  
Payment System ◽  
Agent Based Modeling ◽  
Payment Systems ◽  
Agent Based ◽  
Risk Monitoring ◽  
The Face ◽  
Modern Economic ◽  
Institutional Linkages

Payment systems constitute a critical aspect of modern economic infrastructure; yet understanding the payment system mechanisms remains elusive in the face of rapidly evolving financial markets and intricate institutional linkages. Computer simulations of payment systems have proven useful in determining optimal balances of risk, efficiency, and liquidity usage. Constructs such as gridlock-resolution algorithms and liquidity-saving mechanisms are now routinely applied in such areas as optimization of liquidity and payment delay, but can also be used to assess potential impacts of changes in policy or system setups. In addition, simulations can be extended to incorporate behavioral elements of participants by modeling their behavior with Agent-Based Modeling (ABM). The 2008 global financial crisis has increased interest in simulations to identify and quantify risk, particularly where new channels of contagion and complex interlinkages of markets and payment systems are involved. Payment system simulations offer central bank authorities broad possibilities to improve their risk monitoring and should be incorporated as a standard part of financial stability analysis.

scholarly journals On Pooled OLS and Panel Regression Models for Assessing the Contributions of Electronic Payment System on Commercial Banks Profitability

2021 ◽  
Vol 25 (2) ◽  
pp. 61-81
Author(s):  
Kayode S. Adekeye ◽  
◽  
Kelvin E. Igwe ◽  
Olaniyi M. Olayiwola ◽  
◽  
...  
Keyword(s):  
Commercial Banks ◽  
Regression Models ◽  
Payment System ◽  
Panel Regression ◽  
Electronic Payment ◽  
Payment Systems ◽  
Effect Model ◽  
The Impact ◽  
Electronic Payment System ◽  
Panel Regression Models

This study examined the impact of electronic payment system on the profitability of commercial banks in Nigeria. Pooled OLS and Panel regression models were fitted on the data extracted from the banks’ annual reports, Nigerian interbank settlement scheme, and central bank of Nigeria website. The assessment of the contribution of the various electronic payment systems considered were measured using Breusch and Pagan Lagrangian Multiplier (LM) Test, the Hausman Test, Stationarity Test, The Schwarz Criterion, and the Akaike Information Criterion. Results obtained showed that the random effect model was more appropriate than the fixed effect model for all the electronic payment systems considered in this study. Furthermore, it was discovered that there exists a positive relationship between the electronic payment systems and profitability of the commercial banks in Nigeria.

scholarly journals THE STATE OF FINANCIAL ACTIVITY OF INDUSTRIAL ENTERPRISES AS A PREREQUISITE FOR CRISIS MANAGEMENT

2021 ◽  
Author(s):  
Yuliia Ohrenych ◽  
Oleksandr Hrytsenko
Keyword(s):  
Crisis Management ◽  
Financial Stability ◽  
Industrial Development ◽  
Market Competition ◽  
External Factors ◽  
Engineering Industry ◽  
Necessary Condition ◽  
Financial Activity ◽  
Industrial Enterprises ◽  
The Impact

The creation and further operation of any enterprise is aimed at making a profit, which in a market economy is not without the influence of a number of factors. In practice, these factors can be extremely diverse, ranging from market competition and, consequently, the constant need to modernize production, and ending with the political vicissitudes of the country, which often entails a change in the vector of industrial development as a whole. Maintaining the efficiency of financial activities, in conditions of constant external and internal factors of influence, is a necessary condition for the existence of each individual enterprise. Therefore, the analysis of factors and reasons for reducing the efficiency of financial activities of industrial enterprises is important for further decision-making on the implementation of anti-crisis management measures. The article analyzes the main trends of fluctuations in the financial activities of industrial enterprises of Ukraine on the example of PJSC "Zaporizhzhya Electric Locomotive Repair Plant". The key factors and reasons for changing the financial performance of the enterprise are identified. The influence of external factors on the reduction of financial efficiency is characterized. The analysis of a particular enterprise reflects the overall situation in the engineering industry of Ukraine, because each company is equally exposed to external factors on the financial condition, although it does not determine the methods of responding to external threats. The essence of the financial activity of the enterprise, the factors that determine it and the reasons for the impact of internal risks on the financial activities of economic entities are considered. The analysis of financial activity of the enterprise is carried out through a prism of indicators of profitability, liquidity, a condition of property, relative indicators of an estimation of financial stability and business activity. The necessity and expediency of anti-crisis management at an industrial enterprise have been established. The author identifies the main directions of improving the financial situation.

Liquidity Saving Mechanisms in Payment Systems and Settlement Liquidity

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.

scholarly journals The Impact of Israeli and Saudi Arabian Geopolitical Risks on the Lebanese Financial Market

2021 ◽  
Vol 14 (3) ◽  
pp. 94
Author(s):  
Layal Mansour-Ichrakieh
Keyword(s):  
Saudi Arabia ◽  
Causal Relationship ◽  
Financial Market ◽  
Economic Activity ◽  
Financial Stability ◽  
Vector Autoregression ◽  
Economic Study ◽  
Var Models ◽  
The Impact ◽  
Geopolitical Risks

Hezbollah is best defined in geopolitics as the Iranian ideology proxy that aims to grow the Persian footprint and to gain geopolitical strategic depth in the region. Its role continuously requires geopolitical conflicts, mainly against Saudi Arabia and Israel—for resistance, ideological, and geopolitical purposes. Being a state within a state, Hezbollah militia makes sovereign geopolitical decisions and forces Lebanon to pay for the consequences. This is the first economic study that empirically investigates under vector autoregression (VAR) models the dynamic causal relationship between Saudi Arabia and Israel’s geopolitical risks and Lebanon’s financial stability and economic activity. The results show that Saudi Arabia and Israel’s geopolitical risks affect Lebanon’s economy differently. Economic and financial stability cannot be promoted independently of regional geopolitical conflict.

Report to the Executive Boards of the IMF and the World Bank on the New CPSS-IOSCO Principles for Financial Market Infrastructures

Policy Papers ◽  
2012 ◽  
Vol 2012 (60) ◽  
Author(s):  
Keyword(s):  
Financial Market ◽  
International Standards ◽  
Payment Systems ◽  
Over The Counter ◽  
Settlement Systems ◽  
Otc Derivatives ◽  
The World Bank ◽  
Financial Transactions ◽  
Executive Boards ◽  
Central Securities Depositories

New and revised international standards for safe and efficient Financial Market Infrastructures (FMIs) were published in April 2012. The Committee on Payment and Settlement Systems (CPSS) and the International Organization of Securities Commissions (IOSCO) reviewed the existing sets of standards for FMIs and replaced them by one new set of Principles for Financial Market Infrastructures. Appendix I outlines the 24 new Principles for FMIs as well as the 5 responsibilities for authorities. FMIs facilitate the clearing, settlement, and recording of monetary and other financial transactions, such as payments, securities and derivatives contracts. The term FMI refers to payment systems (PSs) that are systemically important, central securities depositories (CSDs), securities settlement systems (SSSs), and central counterparties (CCPs). The revised standards also incorporate additional guidance for over-the-counter (OTC) derivatives CCPs and trade repositories (TRs).

scholarly journals THE IMPACT OF CORONAVIRUS ON FINANCIAL MARKETS OF DEVELOPED COUNTRIES

2021 ◽  
pp. 25-33
Author(s):  
Mehjbeen
Keyword(s):  
Financial Markets ◽  
Financial Market ◽  
Capital Market ◽  
Financial Stability ◽  
Money Market ◽  
World Health ◽  
Future Research ◽  
Time Interval ◽  
Study Results ◽  
The Impact

According to the World Health Organization, tens of millions of confirmed cases and hundreds of thousands of confirmed deaths have been registered worldwide. COVID-19, a kind of coronavirus, has emerged as one of the most serious dangers to the global economy and financial markets in human history. The Covid-19 virus's introduction has caused a global reduction in economic activity, perhaps posing new dangers to financial stability. This study aims to look into and reveal the effect of coronavirus on two financial markets. Ten advanced countries' capital market and money market data with the time interval from March 2020 to November 2020 has been used in this study. Six indices of these financial market Shares, Mutual Funds, Treasury Bills, Certificates of Deposits, Bonds, and Mortgages worked as samples. The research has been conducted on advanced nations USA, Norway, Canada, Germany, Ireland, Sweden, Singapore, Netherlands, Australia, and Switzerland. Panel Regression Analysis, Spearman's rank correlation, and ANOVA are used to estimate the study results. The scholar constructs a weekly panel data of COVID- 19 confirmed cases and financial market indices. The second purpose is to calculate the Risk on the six chosen indices of these markets. COVAR methodology is used to measure the risks among capital market and money markets indices. Interestingly, this research noticed that all financial markets impacted by the coronavirus while the capital market has recorded maximum fluctuations and the stock market show minimum volatility. The final results give a detailed understanding of financial market indices. It will support future research on other money and Capital markets indices and investors after the Coronavirus period. KEYWORDS: Coronavirus, Financial Markets, COVAR, COVID-19 Confirmed Cases. Capital Market. Money Market, Developed economies,

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