Arbeitspapier
The impact of operational events on the network structure of the LVTS
The author uses a quantitative network analysis approach to assess how participants in the Large Value Transfer System (LVTS) respond to partial outages at other banks. Despite the limited number of operational events, benchmarks can be established. For example, the effect of a partial outage at a big six bank that has a net payment balance of $1 billion is estimated to correspond to a decline in connectivity of about 6 or 7 per cent, due to other participants not sending payments to the problem participant. This suggests that participants tend to perceive a partial outage at a counterparty as inconvenient enough to warrant a delaying of payments, at least to the problem participant. There is no strong evidence of systemic effects, whereby participants also delay payments to nonproblem counterparties, in an effort to maintain a reasonable liquidity position. Notable events mostly occurred in 2004 or 2005, and the incidence of operational events did not increase over the sample period. The improvement of contingency measures, such as the use of the LVTS Direct Network, possibly contributed in this regard.
- Language
-
Englisch
- Bibliographic citation
-
Series: Bank of Canada Discussion Paper ; No. 2011-7
- Classification
-
Wirtschaft
Econometric and Statistical Methods: Special Topics: Other
Information and Market Efficiency; Event Studies; Insider Trading
Banks; Depository Institutions; Micro Finance Institutions; Mortgages
- Subject
-
Payment, clearing, and settlement systems
Finanzsektor
Zahlungsverkehr
Verrechnungsverkehr
Unternehmensnetzwerk
Kanada
- Event
-
Geistige Schöpfung
- (who)
-
Roberts, Tom
- Event
-
Veröffentlichung
- (who)
-
Bank of Canada
- (where)
-
Ottawa
- (when)
-
2011
- DOI
-
doi:10.34989/sdp-2011-7
- Handle
- Last update
-
10.03.2025, 11:42 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Roberts, Tom
- Bank of Canada
Time of origin
- 2011
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