Banks’ intraday liquidity management during operational outages: Theory and evidence from the UK payment system

Exploring the Impact of Liquidity on Profitability: Evidence from Banking Sector of Pakistan

“…The Liquidity risk management is a crucial factor for risk management framework of the banking sector and other financial institutions because it affects the profitability [20]. A well-managed liquidity monitoring regulates more or less managing decisions on the basis of on bank liquidity situations to avoid losses [21].…”

Payment prioritisation and liquidity risk in collateralised interbank payment systems

“…Prioritisation has been introduced into the two-period game-theoretic literature by Merrouche and Schanz (2009), where payments are treated in a binary manner as either priority or non-priority. This partition allows the implementation of a Balance-Reactive Gross Settlement strategy (Norman, 2010), which is implemented as follows.…”

Reaction functions of the participants in Colombia’s large-value payment system

“…In the economics of large value payments the concept of reaction function designates the relationship that exists between the payments sent and received by an entity, in an attempt to measure the strategic complementarities. For that reason, this subject is of relevant importance to central banks, especially during times of failures of the LVPS (McAndrews and Potter 2002, Ledrut 2007, Mills and Nesmith 2008, Perlin and Schanz 2010, and Merrouche and Schanz 2010.…”

“…The temporary or permanent insufficiency of funds in the sender's account could also have systemic effects on the large-value payments system. In this matter, some studies such as that of Ledrut (2007), Mills and Nesmith (2008), Merrouche and Schanz (2010) and Perlin and Schanz (2010), examine how entities react in response to an operational failure experienced by one of their counterparties that also make use of the payments system. According to these authors, a simulated shock to the biggest entity of the system will make the remaining participants stop sending of payments to that entity, in an attempt to save liquidity.…”