How banks create gridlock to save liquidity in Canada's large value payment system

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Bibliographic Details
Authors and Corporations:	Garratt, Rod (Author), Lu, Zhentong (Author), Tian, Phoebe (Author)
Other Authors:	Lu, Zhentong [Author] • Tian, Phoebe [Author]
Edition:	Last updated: May 4, 2023
Type of Resource:	E-Book
Language:	English
published:	[Ottawa] Bank of Canada [2023]
Series:	Bank of Canada: Staff working paper ; 2023, 26
Subjects:	Financial institutions Payment clearing and settlement systems Graue Literatur
Source:	Verbunddaten SWB Lizenzfreie Online-Ressourcen

Description
Summary:	Using detailed data from Canada's new high-value payment system (HVPS), we show how participants of the system save liquidity by exploiting the new gridlock resolution arrangement. These observed behaviors are consistent with the equilibrium of a "gridlock game" that captures the key incentives that participants face in the system. The findings have important implications for the design of HVPSs and shed light on financial institutions' liquidity preference.
Physical Description:	1 Online-Ressource (circa 45 Seiten); Illustrationen
DOI:	10.34989/swp-2023-26