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1. Introduction
2. Outline
3. The importance of LVPS
4. Payments in LVPS often settled in real time
5. Operational outages: negatively impact a LVPS
6. Operational outages are costly
7. Costs of operational outages can spread
8. Operational outage's and participants' balances
9. No outage
10. Operational outage at bank A (1)
11. Operational outage at bank A (2)
12. Impact of the operational outage in the example
13. Determining impact of operational outages
14. Topology of a LVPS
15. Examples of network topologies: two extremes
16. Participants connected by a few hubs
17. Network topology: hubs and operational outages
18. Participants' strategic behavior
19. Participants, operators and central banks
20. Contingency planning
21. Routine safeguards
22. Reducing uncertainty
23. Central bank liquidity provision
24. Fedwire during 9/11/2001
25. Connectivity issues at multiple banks
26. Disruption caused less payments to be settled
27. Disruption in the securities market as well
28. Break down in coordination of payments
29. Low levels of connectivity
30. Federal Reserve response to 9/11/2001
31. Federal Reserve liquidity measures
32. Reserves at the Fed increased
33. Other smaller disruptions
34. Multi-bank outages
35. Summary: operation outages in LVPS
36. Summary: determinants
37. Summary: reducing operational outages impact
38. Summary: tools in use during actual disruptions
39. Conclusion and thanks you
40. References

Topics Covered

• Large value payment systems (LVPS) are important for the financial system
• The need for reliable liquidity sources to facilitate settlement
• Operational outages can negatively impact a LVPS
• Operational outages are costly
• Example of an operational outage
• Factors that determine the impact of operational outages
• Network topologies
• Participant's strategic behavior
• Participants, operators and central banks can take steps to mitigate an outage's impact
• Fedwire during 9/11/2001
• Federal reserve response to 9/11/2001
• Federal reserve liquidity measures
• Multi-bank outages

Links

Series:

• Effective Oversight of Payment and Settlement Systems

Categories:

• Finance, Accounting & Economics
• Technology & Operations

Talk Citation

Publication History

• Published on March 31, 2010