Template-type: ReDIF-Paper 1.0
Author-Name: Dr. Robert Oleschak
Author-Name-First: Robert
Author-Name-Last: Oleschak
Author-Person: pol267
Author-Name: Dr. Thomas Nellen
Author-Name-First: Thomas
Author-Name-Last: Nellen
Author-Person: pne256
Title: Does SIC need a heart pacemaker?
Abstract: Real-time gross settlement (RTGS) systems effect final settlement of payments continuously and on an individual basis. This generates a trade-off between liquidity needs and settlement delay. Against the background of reconstruction discussions, the paper analyses whether more advanced algorithms reduce liquidity needs and settlement delay if applied to the Swiss Interbank Clearing (SIC) system. Simulations run with the BoF-PSS2 simulator show that expected reductions in liquidity needs and settlement delay are modest and should carefully be evaluated against costs. More advanced settlement algorithms improve settlement efficiency only if payment release behaviour is highly aligned.
Length: 41 pages
Creation-Date: 2013
Contact-Email: forschung@snb.ch
File-URL: https://www.snb.ch/en/publications/research/working-papers/2013/working_paper_2013_10
File-Format: text/html
Number: 2013-10
Classification-JEL: C63, E42, G18
Keywords: payment system, simulation, payment splitting, liquidity-saving mechanisms
Handle: RePEc:snb:snbwpa:2013-10