Research Discussion Papers, Bank of Finland
Morten L. Bech and Kimmo Soramäki
Gridlock Resolution in Interbank Payment Systems
Abstract: The paper analyses the severity of gridlocks in interbank
payment systems operating on a real time basis and evaluates by means of
simulations the merits of a gridlock resolution algorithm. Data used in the
simulations consist of actual payments settled in the Danish and Finnish
RTGS systems. The algorithm is found to be applicable to a real time
environment and effective in reducing queuing in the systems at all levels
of liquidity, but in particular when intra-day liquidity is scarce.
Keywords: payment systems; liquidity; gridlock; algorithms; settlement; (follow links to similar papers)
34 pages, June 13, 2001
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