Payment economics: studying the mechanics of exchange

Lacker, Jeffrey M.; Weinberg, John A.

doi:10.1016/s0304-3932(03)00006-0

Cited by 10 publications

(6 citation statements)

References 17 publications

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“…In light of banks' traditionally significant role as payment intermediaries, Lacker and Weinberg (2003) and Kahn and Roberds (2009) review several studies related to banks' role in payment systems and suggest that more work should be done on "payment economics"-albeit from a central banking perspective with a slant on monetary theory rather than industrial organization. Some studies relating to payment issues that matter most acutely to central banks, such as VanHoose (2000) and Holthausen and Rochet (2006), examine central bank payment-system issues from an industrial organization point of view.…”

Section: Antitrust Issues In Bank Payment Networkmentioning

confidence: 99%

The Industrial Organization of Banking

VanHoose¹

2010

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Section: Antitrust Issues In Bank Payment Networkmentioning

confidence: 99%

The Industrial Organization of Banking

VanHoose¹

2010

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“…The payment and settlement system consists of the system operator and participants (banks, unions of credit, and other institutions of finance and credit). The major distinction between different interbank payment systems is whether a system is operating on a net or gross basis, or pay-ments are processed individually in the batches (Lacker et al 2003). The most usual 3 pure implementations of these principles are: real-time gross settlement (RTGS), time-designated net settlement (TDNS), and continuous or secured net settlement (CNS).…”

Section: The Structure Of the Interbank Settlements Systemmentioning

confidence: 99%

Simulation of Automated Real‐time Gross Interbank Settlement

Bakšys¹,

Sakalauskas²

2009

Technological and Economic Development of Economy

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Abstract. The aim of this paper is to analyze algorithms for the automated real-time gross interbank settlement (RTGS). One can change the efficiency of settlement systems by perfecting the processing of settlements and/or implementing rules for solving the gridlocks, or by applying the tools of refinancing and reservation. We focus on the settlement simulation of the Trans-European Automated Real-time Gross Settlement Express Transfer system (TARGET2). The system of modelling, simulation, and optimization of settlements (Bakšys and Sakalauskas 2007b) is applied in the simulation of TARGET2, estimating the parameters of simulation according to the real data.

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“…For the second part of the proof, we …rst show that PC (15) and (16) imply that all other PC are also satis…ed. First, note that the value function V (d t ; p t ) is linear in p t and given…”

Section: Appendixmentioning

confidence: 99%

A Dynamic Model of the Payment System

Koeppl

Monnet

Temzelides

2007

Working Paper (Federal Reserve Bank of Philadelphia)

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We study the design of e¢ cient intertemporal payment arrangements when the ability of agents to perform certain welfare-improving transactions is subject to random and unobservable shocks. E¢ ciency is achieved via a payment system that assigns balances to participants, adjusts them based on the histories of transactions, and periodically resets them through settlement. Our analysis addresses two key issues in the design of actual payment systems. First, e¢ cient use of information requires that agents participating in transactions that do not involve monitoring frictions subsidize those that are subject to such frictions. Second, the payment system should explore the trade-o¤ between higher liquidity costs from settlement and the need to provide intertemporal incentives. In order to counter a higher exposure to default, an increase in settlement costs implies that the volume of transactions must decrease, but also that the frequency of settlement must increase.

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Payment economics: studying the mechanics of exchange

Cited by 10 publications

References 17 publications

The Industrial Organization of Banking

The Industrial Organization of Banking

Simulation of Automated Real‐time Gross Interbank Settlement

A Dynamic Model of the Payment System

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