The Central Bank’s Role in the Payment System: Legal and Policy Aspects

Abstract:     
The paper starts with a brief overview of the payment system and the roles central banks have traditionally played as payment intermediaries. In particular, it discusses interbank settlement and the role of bank money as a settlement asset. The paper shows that the concept of settlement finality, which has both legal and risk management dimensions, is a key attribute of any form of payment and is not a unique attribute of payments made through a central bank.

Number of Pages in PDF File: 33

Keywords: central bank, payment system, clearing, interbank settlement, interbank payment

JEL Classification: E5, E58, G18, N20

Accepted Paper Series