Advertisement

Private Sector Solutions to Payments System Fragility

  • Robert A. Eisenbeis
Chapter
Part of the Financial and Monetary Policy Studies book series (FMPS, volume 30)

Abstract

The 1974 failure of Herstatt Bank and the disruptions which hit financial markets ushered in an era of heightened concern about the potential vulnerability of payments systems, especially the wholesale large-value systems, to systemic risk and other problems. Systemic risk—the likelihood that a problem in one institution will cause the insolvency of healthy institutions—through runs, the creation of liquidity problems, or other forces, has been a major policy focus.1

Keywords

Central Bank Credit Risk Federal Reserve Payment System Full Cost 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. Bank of England and APACS. “The Development of Real-Time Gross Settlement ( RTGS) in the United Kingdom.” Information release, April 1994.Google Scholar
  2. BIS. “Report on Netting Schemes.” prepared by the Group of Experts on Payments Systems of central banks of the Group of 10 Countries, February 1989.Google Scholar
  3. BIS. “Report of the Committee on Interbank Netting Schemes of the Central Banks of the Group of Ten Countries.” November 1990.Google Scholar
  4. BIS. “Central Bank Payment and Settlement Services with Respect to Cross-Border and Multi-Currency Transactions.” Report prepared by the Committee on Payment and Settlement Systems of the central banks of the Group of Ten countries, September 1993a.Google Scholar
  5. BIS. “Minimum Common Features for Domestic Payments Systems.” Report of the Committee of Governors of the Central Banks of the Member States of the European Economic Community: Action 2 of the Report on issues of common concern to EC central banks in the field of payments systems, by the Working Group on EC Payment Systems, November 1993b.Google Scholar
  6. BIS. Payment Systems in The Group of Ten Countries. Prepared by the Committee on Payment and Settlement Systems of the central banks of the Group of Ten countries, Basle, December 1993e.Google Scholar
  7. Bryant, John. “A Model of Reserves, Bank Runs, and Deposit Insurance.” Journal of Banking and Finance 4 (1990).Google Scholar
  8. Calomiris, Charles W., and Gary Gorton. The Origins of Banking Panics: Models, Facts, and Bank Regulation.“ In: R. Glenn Hubbard, ed., Financial Markets and Financial Crises. Chicago: University of Chicago Press. 1991, pp. 109–173.Google Scholar
  9. Cohen, Hugh, and William Roberds. “Towards the Systematic Measurement of Systemic Risk.” Working Paper 93–14, Federal Reserve Bank of Atlanta, October 1993.Google Scholar
  10. Corrigan, E. Gerald. “Perspectives on Payment System Risk Reduction.” In: David B. Humphrey, ed., The U.S. Payment System: Efficiency, Risk and the Role of the Federal Reserve (Proceedings of a Symposium on the U.S. Payment System Sponsored by the Federal Reserve Bank of Richmond). Boston, MA: Kluwer Academic Publishers. 1990.Google Scholar
  11. Eisenbeis, Robert A. “Eroding Market Imperfections: Implications for Financial Intermediaries, the Payments System, and Regulatory Reform.” In: Restructuring the Financial System (A Symposium Sponsored by the Federal Reserve Bank of Kansas City), Jackson Hole, Wyoming, 1987.Google Scholar
  12. Flannery, Mark J. “Payments System Risk and Public Policy.” In: William S. Hararf and Rose Marie Kushmeider, eds., Restructuring Banking and Financial Services in America. Washington, DC: American Enterprise Institute, 1988.Google Scholar
  13. Furash and Company. Banking’s Role in Tomorrow’s Payments System: Ensuring A Role for Banks, Vol. 1. ( A Study Prepared for the Banking Research Fund on Behalf of the Payments System Committee of the Bankers Roundtable ), June 1994.Google Scholar
  14. Gilbert, R. Alton. “Implications of Netting Arrangements for Bank Risk in Foreign Exchange Transactions.” Economic Review ( Federal Reserve Bank of St. Louis.) (January/February 1992 ).Google Scholar
  15. Juncker, George R., Bruce J. Summers, and Florence M. Young. “A Primer on the Settlement of Payments in the United States.” Federal Reserve Bulletin (November 1991).Google Scholar
  16. Kane, Edward J. “Incentive Conflict in the International Regulatory Agreement on Risk-based Capital.” In: R.P. Chang and S. G. Rhee, eds., Pacific Basin Capital Markets Research, Vol. 2. Amsterdam: Elsevier. 1991, pp. 3–21.Google Scholar
  17. Kane, Edward J. “How Market Forces Influence the Structure of Financial Regulation.” In: W. Haraf and R. M. Kushmeider eds., Restructuring Banking and Financial Services in America. Washington, DC: American Enterprise Institute for Public Policy Research. 1988.Google Scholar
  18. Kaufman, George G. “Banking Risk in Historical Perspective.” Proceedings of a Conference on Bank Structure and Competition, Federal Reserve Bank of Chicago, May 1986.Google Scholar
  19. Kaufman, George G. “Bank Contagion: A Review of the Theory and Evidence.” Journal of Financial Seryices Research 8 (2) (April 1994).Google Scholar
  20. Knight, Frank H. Risk, Uncertainty, and Profit. Chicago: University of Chicago Press. 1971 (1921).Google Scholar
  21. Mengle, David L. “Behind the Money Market: Clearing and Settling Money Market Instruments.” Economic Review (Federal Reserve Bank of Richmond) (September/October 1992 ).Google Scholar
  22. Mengle, David L. “Legal and Regulatory Reform in Electronic Payments: An Evaluation of Payment Finality Rules.” In: David B. Humphrey, ed., The U.S. Payment System: Efficiency, Risk and the Role of the Federal Reserve (Proceedings of a Symposium on the U.S. Payments System Sponsored by the Federal Reserve Bank of Richmond). Boston: Kluwer Academic Publishers. 1990.Google Scholar
  23. Saunders. Anthony, and Steven Wilson. “Contagious Bank Runs: Evidence from the 1929–1933 Period.” Stern School of Business, New York University, March 1993.Google Scholar
  24. Smith, Randall, and Steven Lipin. `Beleaguered Giant: As Derivatives Losses Rise, Industry Fights to Avert Regulation.“ Wall Street Journal, Thursday, August 25, 1994.Google Scholar
  25. Summers, Bruce J. “Clearing and Payments Systems: The Role of the Central Bank.” Federal Reserve Bulletin (February 1991).Google Scholar

Copyright information

© Springer Science+Business Media New York 1995

Authors and Affiliations

  • Robert A. Eisenbeis
    • 1
  1. 1.Kenan-Flagler Business SchoolUniversity of North Carolina at Chapel HillChapel HillUSA

Personalised recommendations