Does SIC need a heart pacemaker?

Robert Oleschak () and Thomas Nellen

No 2013-10, Working Papers from Swiss National Bank

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.

Keywords: payment system; simulation; payment splitting; liquidity-saving mechanisms (search for similar items in EconPapers)
JEL-codes: C63 E42 G18 (search for similar items in EconPapers)
Pages: 41 pages
Date: 2013
New Economics Papers: this item is included in nep-cmp
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Persistent link: https://EconPapers.repec.org/RePEc:snb:snbwpa:2013-10

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