+7 925 966 4690, 9am6pm (GMT+3), Monday – Friday
ИД «Финансы и кредит»

JOURNALS

  

FOR AUTHORS

  

SUBSCRIBE

    
Finance and Credit
 

Liquidity pool as a way to manage liquidity risk in payment systems

Vol. 24, Iss. 1, JANUARY 2018

Received: 13 November 2017

Received in revised form: 27 November 2017

Accepted: 11 December 2017

Available online: 29 January 2018

Subject Heading: Financial system

JEL Classification: E42, G32

Pages: 209–226

https://doi.org/10.24891/fc.24.1.209

Masino M.N. Financial University under Government of Russian Federation, Moscow, Russian Federation
mstislavm@gmail.com

https://orcid.org/0000-0002-9961-5376

Larionov A.V. National Research University Higher School of Economics, Moscow, Russian Federation
alarionov@hse.ru

https://orcid.org/0000-0001-8657-6809

Importance This paper discusses the issues of liquidity pool applying as a way to manage the liquidity risk in payment systems.
Objectives The study aims to develop an approach to the systemic description of the risk management (RM) practice in payment systems, as well as its testing through a liquidity pool.
Methods For the study, we used the international and domestic standards in the field of risk management. The existing practice of using this risk management method in TARGET 2 was used to describe the aspects of the liquidity pool application.
Results When considering the liquidity pool application peculiarities, we formed and now present an algorithm of choice of risk management practice in the payment system, which is universal and can be applied to choose some other risk management methods.
Conclusions and Relevance The liquidity pool is an effective tool to reduce the risk of liquidity in the payment system and to increase the attractiveness of the payment system to potential participants. The presented description of the RM practice through liquidity pool can be the basis of the national standard on introduction of risk-management system in Russian payment systems. The discussed RM practice should be considered as an appendix to a part of the description of application of risk-management process in the payment system.

Keywords: risk management, liquidity pool, payment systems, liquidity risk, attained risk level

References:

  1. Masino M.N., Larionov A.V. [Methodology of risk management process implementation in payment systems]. Upravlenie finansovymi riskami = Financial Risk Management Journal, 2016, no. 4, pp. 288–297. (In Russ.)
  2. Simanovskii A.Yu. [EAEU: Certain regulatory aspects of financial integration]. Den'gi i kredit = Money and Credit, 2016, no. 12, pp. 21–23. URL: Link (In Russ)
  3. Belousova V.Yu., Krivokharchenko A.G., Usoskin V.M. [Regulation of liquidity as a factor in the development of the payment systems]. Den'gi i kredit = Money and Credit, 2014, no. 9, pp. 57–64. URL: Link (In Russ.)
  4. Usoskin V.M., Belousova V.Yu. [Modern systems of interbank settlements]. Den'gi i kredit = Money and Credit, 2012, no. 9, pp. 24–30. URL: Link (In Russ.)
  5. Usoskin V.M., Belousova V.Yu. [Global trends payment systems' development]. Den'gi i kredit = Money and Credit, 2010, no. 11, pp. 39–48. URL: Link (In Russ.)
  6. Masino M.N., Larionov A.V. [Qualitative comparative analysis of banking risks and payment system risks]. Bankovskoe delo, 2015, no. 11, pp. 40–47. (In Russ.)
  7. Biryukova O.V. [EU financial market integration experience]. Bankovskoe delo, 2015, no. 7, pp. 44–49. (In Russ.)
  8. Yudaeva K. [On the opportunities, targets and mechanisms of monetary policy under the current conditions]. Voprosy Ekonomiki, 2014, no. 9, pp. 4–12. (In Russ.)
  9. Kalgin A., Podolskiy D., Parfenteva D. et al. Performance Management and Job-Goal Alignment: A Conditional Process Model of Turnover Intention in the Public Sector. International Journal of Public Sector Management, 2018, vol. 31, iss. 1, pp. 65–80. URL: Link
  10. Lobanov A. On Some Approaches to Managing Market Risk Using VaR Limits: A Note. In: Bera A., Ivliev S., Lillo F. (eds) Financial Econometrics and Empirical Market Microstructure. Springer, Cham, 2015, pp. 195–206. URL: Link
  11. Docherty P. and Gehong Wang. Using Synthetic Data to Evaluate the Impact of RTGS on Systemic Risk in the Australian Payments System. UTS Working Paper, 2006, vol. 149. URL: Link
  12. McAndrews J.J. E-money and Payment System Risks. Contemporary Economic Policy, 1999, vol. 17, iss. 3, pp. 348–357.
  13. Bech M.L., Hobijn B. Technology Diffusion within Central Banking: The Case of Real-Time Gross Settlement. International Journal of Central Banking, 2007, vol. 3, iss. 3, pp. 147–182. URL: Link
  14. Bech M.L., Garatt R. The Intraday Liquidity Management Game. Journal of Economic Theory, 2003, vol. 109, iss. 2, pp. 198–219. URL: Link00016-4
  15. Bernal J., Cepeda F., Ortega F. Estimating the Contribution of Liquidity Sources in the Colombian Large-value Real-time Gross Settlement Payment System: A Preliminary Approach. Journal of Payments Strategy & Systems, 2012, vol. 6, no. 2, pp. 159–182.
  16. McAndrews J., Trundle J. New Payment System Designs: Causes and Consequences. Bank of England Financial Stability Review, 2001, December, pp. 127–136.
  17. Norman B. Liquidity Saving in Real-time Gross Settlement Systems: An Overview. Journal of Payments Strategy & Systems, 2010, vol. 4, no. 3, pp. 261–276.

View all articles of issue

 

ISSN 2311-8709 (Online)
ISSN 2071-4688 (Print)

Journal current issue

Vol. 30, Iss. 3
March 2024

Archive