Gridlock Resolution in Interbank Payment Systems

34 Pages Posted: 17 Aug 2017 Last revised: 20 Jun 2018

See all articles by Morten L. Bech

Morten L. Bech

Bank for International Settlements (BIS) - Committee on Payments and Market Infrastructures

Kimmo Soramäki

Financial Network Analytics (FNA)

Date Written: June 13, 2001

Abstract

The paper analyses the severity of gridlocks in interbank payment systems operating on a real time basis and evaluates by means of simulations the merits of a gridlock resolution algorithm.Data used in the simulations consist of actual payments settled in the Danish and Finnish RTGS systems.The algorithm is found to be applicable to a real time environment and effective in reducing queuing in the systems at all levels of liquidity, but in particular when intra-day liquidity is scarce

Suggested Citation

Bech, Morten L. and Soramäki, Kimmo, Gridlock Resolution in Interbank Payment Systems (June 13, 2001). Bank of Finland Research Discussion Paper No. 9/2001, Available at SSRN: https://ssrn.com/abstract=3018053

Morten L. Bech (Contact Author)

Bank for International Settlements (BIS) - Committee on Payments and Market Infrastructures ( email )

Centralbahnplatz 2
Basel, Basel-Stadt 4002
Switzerland
41612808923 (Phone)

Kimmo Soramäki

Financial Network Analytics (FNA)

4-8 Crown Place
London, EC2A 4BT
United Kingdom

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