This BIS report focuses on the operating hours of real-time gross settlement (RTGS) systems, as systems that are key to enhancing cross-border payments. It builds on the public consultation conducted in late 2021.
An extension of RTGS operating hours across jurisdictions could help address current obstacles, thereby increasing the speed of cross-border payments and reducing liquidity costs and settlement risks.
Based on a survey of central banks from 82 jurisdictions, 62 RTGS systems around the world were analysed and three potential “end states” for extending the operating hours of key payment systems were posited:
- End state 1 is an increase in operating hours on current operating days. If undertaken by multiple jurisdictions, this would help to close daily gaps in RTGS operating hours, primarily on standard working days, given that the RTGS systems of most jurisdictions are closed on weekends and public holidays.
- End state 2 involves an extension of operations to additional days on which many RTGS systems do not currently operate. If undertaken by multiple jurisdictions, this would help to close the gaps created by holidays and weekends.
- End state 3 is the extension of operating hours to 24/7. Very few RTGS systems currently provide near 24/7 service. Doing so would likely require substantial operational changes but, if broadly adopted, this would largely remove the frictions for cross-border payments that arise from gaps in opening times.
The report also introduces the concept of a “global settlement window” – the period when the largest number of RTGS systems simultaneously operate. It also discusses operational, risk and policy considerations related to those end states.