The Central Bank’s Role in the Payment System: Legal and Policy Aspects
Christian A. Johnson
University of Utah College of Law
Robert S. Steigerwald
Federal Reserve Bank of Chicago
Current Developments in Monetary and Financial Law (2008 International Monetary Fund), pg. 445-470, 2008
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, N20Accepted Paper Series
Date posted: February 5, 2010
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