The Evolution of Real-Time Gross Settlement: Access, Liquidity and Credit, and Pricing
Categories : Customer and Users of Digital Payments, Microfinance credit savings and insurance
Author: Cleo Turner
This paper identifies and analyzes some policy issues arising from central bank experience and practice in supporting RTGS systems, both as settlement authorities and as service-providing RTGS system operators. By identifying practical policy issues, we hope to motivate operationally concrete responses by individual central banks to system-specific problems, and by consortia of central banks to multi-system problems that may call for harmonized approaches. This analysis relies on the World Bank survey results and on other published information on RTGS principles and practices. The analysis distinguishes between four operational modes of access: to settlement accounts only; to settlement accounts and central bank credit; to facilities to order transfers as an agent on behalf of the owners of settlement accounts; and, indirectly to RTGS services through account holders. With regard to costing and pricing, a full lay out of RTGS production and cost function model that includes 1) administering settlement (reserve) accounts, 2) providing credit and managing risk, and 3) providing funds transfer services.