Payment clearing and settlement systems

• Reviewing Canada’s Monetary Policy Implementation System: Does the Evolving Environment Support Maintaining a Floor System?

  Staff Discussion Paper 2023-10 Toni Gravelle, Ron Morrow, Jonathan Witmer

  At the onset of the pandemic, the Bank of Canada transitioned its framework for monetary policy implementation from a corridor system to a floor system, which it has since decided to maintain. We provide a comprehensive analysis of both frameworks and assess their relative merits based on five key criteria that define a sound framework.

  Content Type(s): Staff research, Staff discussion papers Topic(s): Market structure and pricing, Monetary policy implementation, Payment clearing and settlement systems JEL Code(s): D, D4, D47, E, E4, E42, E5, E58

• How Banks Create Gridlock to Save Liquidity in Canada's Large Value Payment System

  Staff Working Paper 2023-26 Rodney J. Garratt, Zhentong Lu, Phoebe Tian

  We show how participants in Canada’s new high-value payment system save liquidity by exploiting the new gridlock resolution arrangement. The findings have important implications for the design of these systems and shed light on financial institutions’ liquidity preference.

  Content Type(s): Staff research, Staff working papers Topic(s): Financial institutions, Payment clearing and settlement systems JEL Code(s): E, E4, E42, E5, E58, G, G2, G21