The history of interbank settlement arrangements: exploring central banks’ role in the payment system

Ben Norman (), Rachel Shaw () and George Speight ()
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Ben Norman: Bank of England, Postal: Publications Group Bank of England Threadneedle Street London EC2R 8AH
Rachel Shaw: Bank of England, Postal: Publications Group Bank of England Threadneedle Street London EC2R 8AH
George Speight: Bank of England, Postal: Publications Group Bank of England Threadneedle Street London EC2R 8AH

No 412, Bank of England working papers from Bank of England

Abstract: Modern central banks have come to view payment systems as a key area of strategic interest, both as part of their responsibilities for financial stability and for the implementation of monetary policy. By considering the evolution of interbank settlement arrangements and central banking functions in the context of a number of diverse historical country case studies, this paper seeks to improve understanding of the development of, and reasons for, central banks’ current roles. Starting from a situation where the earliest banks gradually began to accept claims on each other, banks introduced a variety of innovations to clear and settle between themselves more efficiently. Focusing particularly on the lender of last resort function – a key characteristic of a central bank – this paper explores whether institutions at the centre of clearing and settlement arrangements developed central bank-like characteristics.

Keywords: Monetary history; central banking; payments clearing and settlement (search for similar items in EconPapers)
JEL-codes: N21 N23 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2011-06-13
New Economics Papers: this item is included in nep-ban, nep-cba, nep-his and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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