A Study On The Impact Of Intraday Credit On China’s Large Value Payment System

Large-value payment system is an important part of our modern payment system, it is connected with the financial institutions, money market, securities market, foreign exchange market, as well as some non-financial institutions, is the core of the country’s financial infrastructure. The association among financial institutions is becoming closer, the general financial market is gradually formed, and accompanied with such trends, connected to the function of the cross-border large-value payment system has been or is about to come, an intermediation market not only across the categories, also across borders. Large-value payment system in the performance of the funds among the various agencies led to bank transfers, monetary policy transmission, as well as financial market trading settlement duties at the same time, when the system members of the crisis and can not afford to become a natural channel for financial risk transfer, the crisis spread to the entire financial system and even the socio-economic system.Perspective from the use of large-value payment system, it is the People’s Bank of China for financial institutions to provide a common payment and settlement services platform, designed to create a fair and competitive business environment, to promote the orderly competition between banks, but also continue to promote the improvement of the banking industry overall the level of service optimization to improve. Introduced the concept of cloud computing, our original set of32City Clearing Processing Center(CCPC) functions also start gradually to transform, only as participating institutions involved in the system node, the most basic packet format checks CCPC can back each other up. The original netting, centralized management and data storage capabilities in the completion of the National Processing Center (NPC), also include the timing, permissions and parameters management functions. This means that the risk of large-value payment system control functions are more centralized and unified, and this change is conducive to the formulation and implementation of policies to foster more effective risk control mechanisms to provide excellent soil.Reserve account balance for each participant on the large-value payment system mainly influenced by the following aspects:firstly, on the previous weekday’s balance, secondly, in the inter-bank lending market lending amount,and third, the net payment in the RTGS system data. Reserve account in the daytime can be overdrawn, but still overdrawn to the end of day you need to pay penalty interest. In addition, the reserve account of central bank needed to meet its statutory deposit reserve standard, if the balance is less than the statutory deposit reserve standards, participating banks need to pay penalty interest to the central bank. Our daily check bank meets the legal deposit requirements in many western countries, such as the United States have up to ten working days of the reserve maintenance period, the end of the period to examine the bank deposits in reserve to maintain the reserve account balance, check wether it meet the settled requirements. Accompanied by the banks to meet the payment requirements to maintain the opportunity cost of excessive reserves. These are also the major cost faced by banks in the management of day liquidity.Researchers on the the daylight overdraft problems of research, mainly focused on the theoretical analysis and policy recommendations in our country. The difference is reflected intraday credit through empirical test to determine the effectiveness of risk mitigation, provieded to discuss the introduction of the mechanism, whether it can bring substantial change is a bottom-up contribution method. Tarashev et al (2009) as the representative of the contrary, from the measurement of the overall system risk, and then identify the level of each single agency contribution to the risk of the entire system, and thus gives the corresponding policy recommendations improve the level of systemic risk or to prevent the further spread of risk in the system, and for the economy to avoid the potential risk impact. The starting point of this study is based on a single institution or a certain type of institutions subject to risks impact trigger the system risk contagion effect. Payment system is another major source of risk to the system to external shocks caused by the vibration caused by the proliferation risks, such as changes in the economic cycle, or fluctuations in asset prices (Reinhart and Rogoff,2009) of this point of view, as well as other complex and volatile incentives to not be included as discussed below.This paper summarizes the first intraday credit application environment both at home and abroad, as well as the outstanding achievements from academic researchers in this area. On the whole, the timely release the bank account overdraft limit is generally considered to be viable and meaningful, appropriately use of daylight overdraft with limited intraday credit to certain qualified banks, not only help to resolve the liquidity risk, but also to some extent mitigate the credit risk of the occurrence (Ren and Li,2012).Subsequently, we explore the delicate relationship between the day of credit and payment system risk control from a qualitative point of view. Access to the data of inter-bank payment from China Payment System Development Report (2010), studying the major domestic banks systemic risk and further discuss the spread of systemic risk in the different categories of banks subject to liquidity strikes. The study established a set of payoff matrix based on the different categories of inter-bank transactions, according to the official statistics of the day transaction data, according to characteristics of each trading day, divide the operation day into three time periods, respectively, analysis of each period are subject to risks, payment behavior expression under the risk exposure. Afterwards, we summarize the risk range characteristics caused by different banks under the strike, draw two representative analysis point, thus grouping to explore different important circumstances the risk of proliferation of payment systems bring.The fourth part is the core of this article. Generated under different combinations of risk matrix, the chapter analyzes the the intraday credit risk of large-value payment system control, from a different perspective to analyze and compare, detailed discussed the effects of been rescued. From the figures, we can distinguish the different changes referring to different different supplyment levels, and this change may be positive, or negative, combined with experiences related to policy implementation, based on the occurrence of a specific time and situation considering the rescue plan. Our findings from domestic transaction data in line with foreign central bank data outcomes, appropriate use of intraday credit liquidity management tools, will able to prevent risks while improve the operating efficiency of the payment system, and this article is more emphasis on the combination of time, risk strength and liquidity replenishment.The cost determines rescue behaviour. Risk-rescue itself is resource-consuming, and the corresponding value of currency is the cost. On the basis of the qualitative analysis, we further establish a theoretical model of the rescue cost, in order to fill the funding gap causing by the risk strike, considering the acquisition costs of different fund channels, combined with the normal payment activity on the basis of the account, positions payment flow change, establish specific risk function under a set of functions. This perspective of further research done under the bedding, need specific analysis of the fixed costs and variable costs, as well as the risk function priori model, in order to achieve a operability model. That is the point of this article’s insufficient, and also a pioneering future research direction.The end of the article is a summary of the full text. Based on the previous conclusions of intraday credit through qualitative analysis, discussed the practical value, and imagined the problems that may occur during use. It contains a supplement to the previous analysis, as well as complementary solutions, such as the reference flow guidance program, step rating arrangement, etc. Hoping this research would do a little reference value for policy making and implementing.