Research On Liquidity Requirements And Efficiency In Large-value Payment Systems

As the core of financial infrastructures, High-Value Payment System (HVPS) in China is an important channel connecting to financial markets, foreign exchange markets, money markets and stock markets. It provides safe, efficient and reliable payment services for banks and other financial institutions, enterprises, and financial markets. In recent years, with the number of participations increasing and payment services of HVPS rapid expansion, there is urgent need to improve liquidity management and settlement efficiency in HVPS.This paper introduces clearing mechanism in RTGS system and DNS system firstly, through the analysis of queuing mechanism in large-value payment system and variety of queuing algorithms providing by BoF-PSS2, we propose two netting-based optimized queue release algorithms, QUFIFONT and QUBYPAFI. Then we conduct several experiments using payment and settement simulator BoF-PSS2 to test the actual effect bringing by different queue release algorithms. Finally, we statistic the indicators from the reports produced by the experiments and make a comparative analysis of them.The experiment results show that the optimized queue release algorithm QUFIFONT can significantly reduce the liquidity requirements of a large-value payment system during the day, solve the issues of the gridlock and deadlock well and bring greater efficiency improved for the large-value payment system simultaneously.