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exogenous, random stream of payment orders. If a bank's liquidity stock is depleted, payments are queued until new liquidity … arrives from other banks, imposing costs on the delaying bank. The paper studies the equilibrium level of liquidity posted in …
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This paper studies banks' incentives regarding the timing of payment submissions in a collateral-based RTGS payment system and how these incentives change with the introduction of a liquidity-saving mechanism (LSM). We show that an LSM allows banks to economise on collateral while also providing...
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in which each bank must receive a payment that provides sufficient funds to allow the settlement of its own payment. In …
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