Author : Mr.D. F. I. Folkerts-Landau
Publisher : International Monetary Fund
Page : 28 pages
File Size : 48,9 Mb
Release : 1997-11-01
Category : Business & Economics
ISBN : 9781451857191
Wholesale Payments and Financial Discipline, Efficiency, and Liquidity by Mr.D. F. I. Folkerts-Landau Pdf
Properly designed wholesale payments system can make a significant contribution to enhancing market discipline in the financial sector, reducing the risk of systemic disturbance and permitting a less extensive safety net for financial institutions. The objective of these reforms has been to achieve a reduction of the credit risk associated with the growth in intraday credit exposures that arises in net settlement systems and in real-time gross systems when the central bank provides daylight overdrafts. Intraday payments-related credit in net settlement systems has been reduced by restructuring payment systems into real-time gross settlement systems with collateralized overdrafts, while in the existing real-time gross settlement systems, the risk-abatement program currently in effect has taken the form of caps and charges on uncollateralized daylight credit.