Hong Kong Clearing House Automated Transfer System (CHATS)


Posted in RTGS | Comments closed



Posted in RTGS | Comments closed


Posted in RTGS | Comments closed


Posted in RTGS | Comments closed

Fees of Real Time Gross Settlement Systems (RTGSs)

Besides the direct costs that RTGSs charge for processing instructions (thus making them final by recording debiting and crediting of paying and receiving participants), there is also a bigger cost: payments system participants need to have large clearing balances available at the central bank (or correspondent banks or collateral to secure intraday credit). Otherwise, the payment cannot go through. And unlike a net settlement system, they cannot get away with possibly having to pay only a smaller amount if they happen to be at the receiving end of a payment as well. Also, the failure to settle an instructed payment because of insufficient funds available, can cascade as parties at the receiving end may be dependent on funds for executing their payments – gridlock is thus possible. Intraday liquidity in the system be available under the form of central bank money. Central banks, for their part, face a choice of whether or not to provide banks with intraday liquidity and if so, what form that provision will take (e.g., by what mechanisms and on what terms the credit will be provided and how any resulting exposures will be managed).(Mañalac, Yap, Torreja Jr, 2008)

Thus, there can be a big indirect cost that can exist out of interests (if the available balances to make payments are based on credits) or opportunity costs (as the money is not used in a return-generating way meanwhile).



Mañalac, W. C., Yap, A. M. and Torreja Jr, M. (2008) ‘Real Time Gross Settlement (RTGS) System and its Implications for Central Banking’, Bangko Sentral Review. Available at: http://www.bsp.gov.ph/downloads/publications/2003/bsr2003_03.pdf (Accessed: 20 June 2017).

Posted in Payment settlement | Comments closed
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