Private Payment Systems, Collateral, and Interest Rates

Kahn, Charles M.

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

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

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

Language

en

Permalink

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

Copyright and License Information

Copyright Springer-Verlag

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