Financial Stability Review
Payment and Settlement Systems Articles
2005
2005 2004 2003 2002 2001 2000 1999 1998 1997 1996
The
Future of Payments
(52k)
(Issue 19, December 2005)
On 19–20 May 2005 the Bank hosted an international conference on ‘The future of payments’. The conference represented an opportunity for all professionals in the area — private sector participants, central bankers and academics — to identify the key issues for the future policy, research and operational agenda in the field. Papers presented at the conference demonstrated that the economics of payments lies at the intersection between mainstream monetary and banking theory and industrial organisation — and at the heart of central banking. This article reviews the key messages learned from the papers and discussions that took place during the conference.
Tiering
in UK Payment Systems: Credit Risk Implications
(102k)
(Issue 19, December 2005)
This article employs a credit risk framework, calibrated using survey data collected by the Bank of England, to analyse the potential credit risk to settlement banks arising from the tiered structure of the large-value payment systems in the United Kingdom. The results suggest that the direct credit exposures arising from this structure, although sizable in absolute terms, do not pose undue risk in normal circumstances. The model framework abstracts from the risks to second-tier banks that could arise from changes in the behaviour of first-tier banks in periods of stress. Anecdotal evidence suggests that these risks could be significant. Direct membership of the large-value payment system or contingency clearing arrangements between second-tier and first-tier banks can both go some way towards mitigating these risks.
Resolving Sovereign Debt Crises: The Market-Based Approach and the Role of the IMF
(202k)
(Issue 18, June 2005)
Resolving sovereign debt crises occasionally requires renegotiation of debts to private creditors, typically in conjunction with an IMF programme. Market mechanisms to facilitate debt renegotiations have improved in recent years but more needs to be done to make the process efficient and equitable. IMF policies specifying the circumstances in which the Fund can lend set the context for debt restructuring negotiations; these policies need to be improved before the market-based approach to crisis resolution can work effectively.
Sovereign Bond Contracts: A Workshop at the Bank of England
(185k)
(Issue 18, June 2005)
Improving the design of sovereign bond contracts is one way in which the arrangements for resolving sovereign debt crises can be strengthened. In January 2005, the Bank of England hosted a workshop that allowed market participants to review recent developments in contract design and consider the case for further innovation. This short article summarises the main points of discussion.
A Framework for Financial Stability
(188k)
(Issue 18, June 2005)
This is the text of a speech delivered by Sir Andrew Large, the Bank of England's Deputy Governor for Financial Stability, at the International Conference on Financial System Stability and Implications of Basel II on 18May 2005 in Istanbul.
Key Resources
|
Memorandum of Understanding between HM Treasury,
the Bank of England and the Financial Services Authority
Download PDF (50k) |
