Neville Arjani

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Staff discussion papers

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Staff working papers

Examining the Trade-Off between Settlement Delay and Intraday Liquidity in Canada's LVTS: A Simulation Approach

Staff Working Paper 2006-20 Neville Arjani
The author explores a fundamental trade-off that occurs between settlement delay and intraday liquidity in the daily operation of large-value payment systems (LVPS), with specific application to Canada's Large Value Transfer System (LVTS).
Content Type(s): Staff research, Staff working papers Topic(s): Payment clearing and settlement systems JEL Code(s): E, E4, E47, G, G2, G21

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Bank publications

Bank of Canada Review articles

April 13, 2007

The Large-Value Payments System: Insights from Selected Bank of Canada Research

Bank of Canada Review - Spring 2007 Neville Arjani, Walter Engert
Given the Bank of Canada's strong interest in the safe and efficient operation of major clearing and settlement systems, the Bank maintains a rigorous research agenda as a means of informing payments system policy and oversight. In this article, Arjani and Engert review recent research undertaken by Bank staff concerning the risk and efficiency of the Large Value Transfer System (LVTS). Based on the findings from this research, the authors conclude that the design of the LVTS strikes an effective balance between risk and efficiency. The article also demonstrates the increased use of simulation analysis as a tool for conducting payments system research. A brief summary of the Bank's oversight strategy for systemically important payments systems is also provided. Goals for future research are noted as well, including modelling of participant behaviour and continued external collaboration with other researchers.
Content Type(s): Publications, Bank of Canada Review articles Topic(s): Financial institutions, Payment clearing and settlement systems

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Financial System Review articles