University of Illinois Urbana-Champaign

Private Payment Systems, Collateral, and Interest Rates

Kahn, Charles M.

Content Files
private_payment_collateral_interest -october 2011.pdf

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https://hdl.handle.net/2142/27757

Description

Title
Private Payment Systems, Collateral, and Interest Rates
Author(s)
Kahn, Charles M.
Issue Date
2011-10-22
Keyword(s)
  • payment systems
  • collateral
  • monetary policy
  • inside money
Date of Ingest
2011-11-07T23:11:14Z
Abstract
Recent developments in private payments arrangements, particularly at the wholesale level, (including recent innovations in China) challenge central banks’ longstanding monopoly on the provision of the ultimate means of settlement for financial transactions. This paper examines competition between public payments arrangements and private intermediaries, and the effect on central banks’ role in monetary policy. Central to the issue is the role of collateral both as a requirement for participation in central bank sponsored payments arrangements and as the backing for private intermediary arrangements. The presence of private systems serves as a check on the ability of a monetary authority to tighten monetary policy.
Publisher
Springer-Verlag
Type of Resource
text
Genre of Resource
Article
Language
en
Permalink
http://hdl.handle.net/2142/27757
Copyright and License Information
Copyright Springer-Verlag

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Research and Publications - Finance Faculty PRIMARY