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Despite the generality of the basic principles of the structure of the main types of payment systems for transferring large sums of money, their architecture and configuration of individual elements of the payment process are very diverse. The approaches to solving such problems as the procedure for entering a payment into the operating block of the system, organizing queues of payment orders and methods of replenishing intraday liquidity are of the greatest interest.
The vast majority of LVPS are owned by the central banks of the respective countries. This fact is due to the important role that central banks play in ensuring financial stability and minimizing systemic risks. In addition, a historically important function of central banks was the regulation of interbank settlements by transferring money through accounts opened with them by participants in the payment process. Central banks generally act as a settlement agent, i.e. an institution that determines the net positions of credit institutions and makes the final transfer of amounts from account to account.
There are also LVPS systems that are owned by private financial institutions (eg CHIPS, EUR01 and SIC). In these systems, in most cases, cooperative management principles are used, where each member has an equal (or proportional) share in the capital of the system. In most cases, with this form of ownership, the central bank of the country is also among the owners, along with private institutions. Examples of such participation are CHAPS sterling (UK), ELL1PS (Belgium), PNS (France). The role of settlement agent, along with the central bank, can be performed by a separate organization belonging to LVPS participants (for example, a clearing house).
Operational management and strategic planning in LVPS is carried out by the governing bodies of the owner of the system, most often the governing structures of the central bank. An important role is played by the system of legal acts, which ensures the efficient and safe functioning of the payment system. Such a legal basis can be a separate law on the fundamentals of the organization of the payment system in the country, covering all aspects of the activities of payment institutions, or a law on the central bank. In some cases, the legal framework is determined by a system of contractual agreements that establish settlement rules in a specific area of settlement transactions.
The principles of admission to the payment system to participate in the implementation of settlements may differ significantly in different countries. The extreme cases range from a "closed club" to complete freedom of any member to join the system. As a rule, each wholesale settlement system establishes a minimum set of requirements for potential participants, taking into account their legal status (for example, resident or non-resident of a given country), capital size, credit rating, volume of payment transactions, compatibility of operating systems, etc. The main factors taken into account when deciding whether to enter the system are the degree of risk and settlement costs associated with the presence of a large number of users.
A potential candidate can be assigned the status of a direct member or an indirect (associated) member. In the first case, the system participant signs the constituent documents that determine the nature and rules of the system's functioning, and opens an account with the settlement settlement agent. Indirect members conduct their calculations using correspondence relations with direct members.
In terms of the number of participants, wholesale payment systems differ significantly from each other. Some systems have several hundred or even thousands of direct participants. For example, FedWire in 2005 had 6.8 thousand participants, TARGET - 2.6 thousand, SIC and BOJ-NET - over 300 each. However, in most countries the number of direct participants in wholesale systems is much smaller (in the Canadian LVTS - 15, in the Swedish K-RIX - 21, etc.).
In recent years, there has been a steady downward trend in the number of participants in LVPS wholesale systems associated with the process of bank mergers and an increase in the concentration of bank capital. So, for 1999-2005. the number of FedWire participants decreased by 32% (from 9.9 thousand to 6.8 thousand), TARGET - by 40%, CHIPS - by 40%, etc. | Bech, Preisig, Soram? Ki, 2008].
Ownership and admission to the system
Organizations that own the payment system as an owner have the authority to determine the general design of LVPS, the procedure for making important decisions, concluding contracts with system participants and payment service providers.The vast majority of LVPS are owned by the central banks of the respective countries. This fact is due to the important role that central banks play in ensuring financial stability and minimizing systemic risks. In addition, a historically important function of central banks was the regulation of interbank settlements by transferring money through accounts opened with them by participants in the payment process. Central banks generally act as a settlement agent, i.e. an institution that determines the net positions of credit institutions and makes the final transfer of amounts from account to account.
There are also LVPS systems that are owned by private financial institutions (eg CHIPS, EUR01 and SIC). In these systems, in most cases, cooperative management principles are used, where each member has an equal (or proportional) share in the capital of the system. In most cases, with this form of ownership, the central bank of the country is also among the owners, along with private institutions. Examples of such participation are CHAPS sterling (UK), ELL1PS (Belgium), PNS (France). The role of settlement agent, along with the central bank, can be performed by a separate organization belonging to LVPS participants (for example, a clearing house).
Operational management and strategic planning in LVPS is carried out by the governing bodies of the owner of the system, most often the governing structures of the central bank. An important role is played by the system of legal acts, which ensures the efficient and safe functioning of the payment system. Such a legal basis can be a separate law on the fundamentals of the organization of the payment system in the country, covering all aspects of the activities of payment institutions, or a law on the central bank. In some cases, the legal framework is determined by a system of contractual agreements that establish settlement rules in a specific area of settlement transactions.
The principles of admission to the payment system to participate in the implementation of settlements may differ significantly in different countries. The extreme cases range from a "closed club" to complete freedom of any member to join the system. As a rule, each wholesale settlement system establishes a minimum set of requirements for potential participants, taking into account their legal status (for example, resident or non-resident of a given country), capital size, credit rating, volume of payment transactions, compatibility of operating systems, etc. The main factors taken into account when deciding whether to enter the system are the degree of risk and settlement costs associated with the presence of a large number of users.
A potential candidate can be assigned the status of a direct member or an indirect (associated) member. In the first case, the system participant signs the constituent documents that determine the nature and rules of the system's functioning, and opens an account with the settlement settlement agent. Indirect members conduct their calculations using correspondence relations with direct members.
In terms of the number of participants, wholesale payment systems differ significantly from each other. Some systems have several hundred or even thousands of direct participants. For example, FedWire in 2005 had 6.8 thousand participants, TARGET - 2.6 thousand, SIC and BOJ-NET - over 300 each. However, in most countries the number of direct participants in wholesale systems is much smaller (in the Canadian LVTS - 15, in the Swedish K-RIX - 21, etc.).
In recent years, there has been a steady downward trend in the number of participants in LVPS wholesale systems associated with the process of bank mergers and an increase in the concentration of bank capital. So, for 1999-2005. the number of FedWire participants decreased by 32% (from 9.9 thousand to 6.8 thousand), TARGET - by 40%, CHIPS - by 40%, etc. | Bech, Preisig, Soram? Ki, 2008].
