Publications and Presentations

Annual Oversight Reports articles
Bank of Canada Review Articles articles
Financial System Review articles

Reducing Systemic Risk: Canada’s New Central Counterparty for the Fixed-Income Market” Pothik Chatterjee, Lana Embree and Peter Youngman, June 2012
Access to Central Clearing Services for Over-the-Counter Derivatives” Joshua Slive, Carolyn Wilkins and Jonathan Witmer, June 2011
Central Counterparties and Systemic Risk” Nikil Chande, Nicholas Labelle and Eric Tuer, December 2010
"The Effects of a Disruption in CDSX Settlement on Activity in the LVTS: A Simulation Study" Lana Embree and Kirby Millar, June 2008
"A Model of Tiered Settlement Networks" James Chapman, Jonathan Chiu, and Miguel Molico, June 2008
"Modelling Payments Systems: A Review of the Literature" Jonathan Chiu and Alexandra Lai, June 2007
"Credit in a Tiered Payments System" Alexandra Lai, Nikil Chande, and Sean O'Connor, December 2006
"The Bank of Canada’s Role in the Oversight of Clearing and Settlement Systems" Walter Engert and Dinah Maclean, June 2006
"The Impact of Unanticipated Defaults in Canada’s Large Value Transfer System" Darcey McVanel, June 2006
"Simulation Analysis: A Tool for Examining the Balance between Safety and Efficiency in Canada\'s Large Value Transfer System" Neville Arjani, December 2005
"Policy Issues in Retail Payments" Sean O'Connor, December 2003
"CDSX: Canada\'s New Clearing and Settlement System for Securities" Darcey McVanel, June 2003
"Excess Collateral in the LVTS: How much is too much?" K. McPhail and A. Vakos, December 2003
"Managing Operational Risk in Clearing and Settlement Systems" K. McPhail, June 2003
"Business-Continuity Planning in Clearing and Settlement Systems: A Systemwide Approach" R. Allenby, June 2003
"Systemic Risk, Designation, and the ACSS," C. A. Northcott, December 2002
"The CLS Bank: Managing Risk in Foreign Exchange Settlements" P. Miller and C. A. Northcott, December 2002
"The Impact of Participant Outages on Canada\'s Large Value Transfer System" K. McPhail and D. Senger, December 2002
"Understanding Intraday Payment Flows in the Large Value Transfer System" L. Cheung, December 2002

Technical Reports
Working Papers

On the Existence and Fragility of Repo Markets”, Hajime Tomura, 2012-17
Estimating the Demand for Settlement Balances in the Canadian Large Value Transfer System”, Nellie Zhang, 2012-15
Analyzing Default Risk and Liquidity Demand during a Financial Crisis: The Case of Canada”, Jason Allen, Ali Hortacsu and Jakub Kastl, 2011-17
Central Bank Haircut Policy”, James Chapman, Jonathan Chiu and Miguel Molico, 2010-23
Estimating the Structure of the Payment Network in the LVTS: An Application of Estimating Communities in Network Data”, James Chapman and Yinan Zhang, 2010-13
"Modelling Payments Systems: A Review of the Literature" Jonathan Chiu and Alexandra Lai, 2007-28
"Credit in a Tiered Payments System" Alexandra Lai, Nikil Chande, and Sean O'Connor, 2006-36
"Examining the Trade-Off between Settlement Delay and Intraday Liquidity in Canada’s LVTS: A Simulation Approach" Neville Arjani, 2006-20
"The Impact of Unanticipated Defaults in Canada\'s Large Value Transfer System" Darcey McVanel, 2005-25
"Excess Collateral in the LVTS: How much is too much?" K. McPhail and A. Vakos, Working Paper 2003-36
"Managing Operational Risk in Payment, Clearing, and Settlement Systems" K. McPhail, Working Paper 2003-2
"Estimating Settlement Risk and the Potential for Contagion in Canada\'s Automated Clearing Settlement System" C. A. Northcott, Working Paper 2002-41
"The Elements of the Global Network for Large-Value Funds Transfers" J. F. Dingle, Working Paper 2001-1
"Certainty of Settlement and Loss Allocation with a Minimum of Collateral" W. Engert, Working Paper 93-14. (Only available in print. Please contact publications@bankofcanada.ca.)
"An Introduction to Multilateral Foreign Exchange Netting" W. Engert, Working Paper 92-5. (Only available in print. Please contact publications@bankofcanada.ca.)

Discussion Papers
Presentations

Bank of Canada Liquidity Facilities: Past, Present and Future” D. Longworth, February 2010. Presented to C.D. Howe Institute, Toronto, Ontario.

"Introduction of LVTS in Canada" C. Goodlet, December 1999. Printed in Current Topics in Payment and Settlement Systems, pages 9-13. Paper presented at CPSS Asian-Pacific Workshop, Hong Kong, Bank for International Settlements

The LVTS is a real-time, electronic transfer system that processes large-value or time-critical payments continuously throughout the day. The system began operations on February 4, 1999. The presentation discusses: the motivation in building the LVTS; some design features of the LVTS, including measures to reduce risk; the use of collateral; and some issues that have arisen since the start-up of the LVTS. The presentation also discusses how the LVTS, which is a multilateral deferred net settlement system, achieves the same desirable outcomes (such as intraday finality of payment) that are provided by a well-designed RTGS system, but with relatively lower collateral costs.

"International Branches and the Canadian Payments System - LVTS and Other Key Issues" C. Freedman, 29 March 1999, Annual International Financial Services Forum, Insight Conference

The presentation provides an overview of the Large Value Transfer System (LVTS) and the Payment Clearing and Settlement Act. This is followed by a discussion of the new legislation which allows foreign banks to branch directly into Canada and the issues that this raises regarding the direct participation of foreign bank branches in the LVTS. Matters of particular concern include the legal issues pertaining to potential choice of law and conflict of law problems in the event of the insolvency of a foreign bank branch that is a direct participant in the LVTS. The presentation then examines how these concerns have been addressed.

"The Canadian Payments System: Recent Developments in Structure and Regulation" C. Freedman and C. Goodlet, May 1998. In Payments Systems in the Global Economy: Risks and Opportunities, 34th Annual Conference on Bank Structure and Competition, Federal Reserve Bank of Chicago.

The presentation describes the principal risks that can arise in clearing and settlement systems. There is a discussion of the public policy objectives in clearing and settlement systems and the efficiency/safety trade-offs involved in the design of such systems. The development and design of the Large Value Transfer System (LVTS) is described, including its risk-control structures. Finally, the Payment Clearing and Settlement Act and the role of the Bank vis-a-vis large value clearing and settlement systems is examined.

Miscellaneous

Guideline Related to Bank of Canada Oversight Activities under the Payment Clearing and Settlement Act
Principles for financial market infrastructures, assessment methodology and disclosure framework” Bank for International Settlement and the International Organization of Securities Commissions, April 2012”
Statistics on payment, clearing and settlement systems in the CPSS countries” Bank for International Settlement, January 2012.
Moving Canada into the Digital Age” Task Force for the Payments System Review, December 2011.<
Payment, clearing and settlement systems in the CPSS countries” Bank for International Settlement, September 2011.
Progress in reducing foreign exchange settlement risk” Bank for International Settlement, May 2008.
A Primer on Canada's Large Value Transfer System, by Neville Arjani and Darcey McVanel, March 2006.
"Assessment of CDSX Against the CPSS-IOSCO Recommendations for “Securities Settlement Systems" D. McVanel, March 2004
Planning an Evolution: The Story of the Canadian Payments Association , James F. Dingle (on-line boolk), 1980-2002
Supervisory Guidance for Managing Settlement Risk in Foreign Exchange Transactions”, Bank for International Settlement, September 2000.
The Payments System in Canada: An Overview of Concepts and Structures" PSAC, Discussion Paper 1, February 1997.
The Canadian Payments System: Public Policy Objectives and Approaches" PSAC, Discussion Paper 2, May 1997.
Access to Payment Networks in the Canadian Payments System" PSAC, Discussion Paper 3, July 1997.

Related Organizations

Bank for International Settlements (BIS)
Canadian Depository for Securities (CDS)
Canadian Derivatives Clearing Corporation (CDCC)
Canadian Payments Association (CPA)
CLS Group
Federal Reserve Bank of New York (payments systems information)

Glossary

Bank of Canada Glossary
Bank for International Settlements glossary for payments and settlement systems.