Regulating Access to International Large-Value Payment Systems

44 Pages Posted: 31 Dec 2000

See all articles by Cornelia Holthausen

Cornelia Holthausen

European Central Bank (ECB); Centre for Economic Policy Research (CEPR)

Thomas Rønde

University of Copenhagen - Department of Economics; Center for Economic and Business Research (CEBR); Centre for Economic Policy Research (CEPR)

Date Written: June 2000

Abstract

This paper studies access regulation to international large-value payment systems when banking supervision is national task. We focus on the choice between net settlement or imposing real time gross settlement. As a novel feature, the communication between the supervisors is endogenized. It is shown that the national supervisors' preferences regarding the settlement method are not perfectly aligned. As a result, systemic risk is excessive under public regulation. Still, leaving access regulation to the private banks can only be optimal if they have superior information about the risk of their foreign counterparty in the settlement system.

Keywords: Large-value Payment Systems, Regulation, Supervision, Systemic Risk

JEL Classification: E58, G20, G28

Suggested Citation

Holthausen, Cornelia and Rønde, Thomas, Regulating Access to International Large-Value Payment Systems (June 2000). EFMA 2000 Athens Meetings; European Central Bank Working Paper No. 22. Available at SSRN: https://ssrn.com/abstract=249848

Cornelia Holthausen (Contact Author)

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany
+49 69 1344 6490 (Phone)
+49 69 1344 855 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Thomas Rønde

University of Copenhagen - Department of Economics ( email )

Øster Farimagsgade 5
Bygning 26
1353 Copenhagen K.
Denmark
+64 9 532 3014 (Phone)
+64 9 532 3000 (Fax)

Center for Economic and Business Research (CEBR) ( email )

Porcelaenshaven, Bldg 65
DK-2000 Frederiksberg
Denmark

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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