What is it about?
In the present study we examine participants' funds usage by applying network and transactional analysis to transactions of SPEI, Mexican real time large value payment system. We build two networks by splitting the number of transactions in payments initiated by third parties and payments initiated by participants. Our main finding using this approach is that both networks have a core-periphery structure. The third-party network has higher connectivity at the core and contribute to increase the completeness index of the whole network. Based on the transactional analysis, we calculated that third party payments are covered with 47% of the total amount of liquidity used, an indication that participants have strong interest to settle third party payment in real time. Further, in the case of third parties' payments, the percentage of payments covered with participants own funds is 15% and 85% the percentage of payment covered with recycled funds; for transactions initiated by participants these percentages are 19% and 81% respectively. We conclude that third party payments increment the proportion of recycling in the settlement process.
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Why is it important?
This paper provides policy guidelines to design Financial Market Infrastructures settlement engines. It gains insides for the usage of funds to cover payments initiated by participants and by third party.
Perspectives
This paper provides policy guidelines to design Financial Market Infrastructures settlement engines. We examine participants' funds usage by applying network and transactional analysis to transactions of SPEI, Mexican real time large value payment system. We build one network using payments initiated by participants and another for third-party initiated payments. We found that both networks have a core-periphery structure. The third-party network has higher connectivity at the core and contributes to increase the completeness index of the network. Further, based on the transactional analysis we conclude that third party payments increment the proportion of recycling in the settlement process.
Dr Biliana Alexandrova-Kabadjova
Banco de Mexico
Read the Original
This page is a summary of: Currents of Liquidity Flows Created by the Different Type of Payments: the Case of SPEI, Intelligent Systems in Accounting Finance & Management, December 2015, Wiley,
DOI: 10.1002/isaf.1385.
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