Arbeitspapier

Real-time gross settlement and the costs of immediacy

Using a neoclassical monetary model, we investigate the welfare cost of a payment system that operates as a real-time gross settlement (RTGS) system. We illustrate how the cost of such systems does not ultimately derive from factors such as "payments gridlock" but instead from the credit constraints imposed by RTGS. We also investigate the welfare consequences of various approaches to the allocation of daylight credit by central banks. The two most popular approaches, collateralization and charging an administered intraday interest rate, are shown to be effective along some dimensions but flawed in others.

Language
Englisch

Bibliographic citation
Series: Working Paper ; No. 98-21a

Classification
Wirtschaft
Subject
Money
Payment systems

Event
Geistige Schöpfung
(who)
Kahn, Charles M.
Roberds, William
Event
Veröffentlichung
(who)
Federal Reserve Bank of Atlanta
(where)
Atlanta, GA
(when)
1999

Handle
Last update
10.03.2025, 11:43 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Kahn, Charles M.
  • Roberds, William
  • Federal Reserve Bank of Atlanta

Time of origin

  • 1999

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