(Real-)Time is Money

10 Pages Posted: 16 Apr 2018

Date Written: April 2018


In the age of high-frequency trading in financial markets and faster payment services in account-to-account (A2A) transactions of bank retail customers, it may seem odd that the shortest maturity that is traded in the money market is overnight. This situation reflects policies implemented by central banks, which provide banks with free intraday liquidity. Such policies are difficult to ground in theory and have limitations which central banks could remedy by conducting real-time monetary policies. The article details how, following that decision, central banks could adapt some features of their monetary policy operational frameworks and of their real-time gross settlement systems. In any case, the potential benefits of such a move should be carefully weighed against the costs for the central banks, financial intermediaries and society.

Keywords: Intraday liquidity, Real-time gross settlement systems, Monetary policy, Financial stability

JEL Classification: E40 E52 E58 G12 G21

Suggested Citation

Pfister, Christian, (Real-)Time is Money (April 2018). Banque de France Working Paper No. 675. Available at SSRN: https://ssrn.com/abstract=3161632 or http://dx.doi.org/10.2139/ssrn.3161632

Christian Pfister (Contact Author)

Banque de France ( email )


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