SIC: Switzerland's new electronic interbank payment system

David L. Mengle and Christian Vital

Economic Review, 1988, vol. 74, issue Nov, 12-27

Abstract: It is an article of faith among American bankers and their regulators that some daylight overdrafts are necessary to the efficient functioning of large-dollar wire transfer systems. But the Swiss have injected an element of doubt by developing a system that does away with daylight overdrafts. Their new system processes a payment only if sufficient clearing funds are on deposit in the sending banks reserve account. If sufficient funds are not available, the payment is held in a queue until covering funds have arrived. Vital and Mengle describe the first eighteen months of the systems operation.

Keywords: Payment systems; Overdrafts (search for similar items in EconPapers)
Date: 1988
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