Payment Economics Network (PEN)

Purpose

The PEN seeks to link policy practices and research activities in the field of payment systems and post-trading infrastructure. This web page fosters the exchange of information by serving as a point of reference for conference announcements, research papers, data sources and news in the field of payment economics.

The quantity and quality of research on issues relating to payment and settlement systems has increased substantially over the past few years. However, payment economics has not yet gained the recognition or infrastructure that other central bank-related research fields enjoy. As a first step towards filling that gap and as an attempt to further strengthen the link between research and practice, the ECB has joined forces with colleagues at other central banks, as well as academics, and established an informal payment economics network for interested central bankers and academics around the world.

The small team that coordinates the PEN includes representatives of the Reserve Bank of Australia, the Bank of Canada, the Bank of England, the European Central Bank, De Nederlandsche Bank and the Federal Reserve Banks of Chicago and New York.

Main research areas

Payment economics covers a variety of issues relating to large-value and retail payment systems, central clearing counterparties (CCPs) and securities settlement systems in general. Research papers fall into three broad categories:

Large Value Payment Systems

This is the most well-established area of payment economics literature and comprises both theoretical contributions and empirical studies. The latter can be divided into five categories: (i) liquidity; (ii) patterns, timing and participants’ behaviour; (iii) interbank money markets; (iv) topology and network analysis; and (v) simulations of counterfactual scenarios.

Retail payment systems

Research on retail payments includes studies looking at credit cards and mobile and electronic payments. It aims to identify types of consumer behaviour, quantify the impact of technological and regulatory advances in the industry, and propose new ideas and features in the field of retail payments.

Settlement systems

Analysis of post-trading infrastructure represents the newest branch of payment economics. Studies looking at the modelling and simulation of CCP settlement – including analysis of newly proposed regulations and the concept of CCPs as public goods – fall into this category, as do studies of other settlement systems, alternative proposals for new clearing networks and discussions about over-the-counter (OTC) transactions.

Data sources

Data sources have traditionally been the biggest obstacle to research studies in the field of payment economics owing to technical constraints and the problems posed by proprietary databases and confidentiality agreements. However, it has recently become easier for practitioners and academics to access and use transaction-level data.

The SWIFT Institute, which was launched in April 2012, fosters independent research by giving grants and access to research data to academics, industry professionals and central bank experts. The SWIFT Institute regularly publishes calls for proposals and call for papers.

The ECB’s Statistical Data Warehouse (SDW) provides a wide range of data relating to payment and securities settlement systems in the European Union.

Contact

If you would like to join the network, make us aware of new papers, conferences or other relevant developments, or simply suggest improvements, please get in touch with us by email.

Disclaimer

The PEN does not itself express views or adopt positions on issues. Any opinions expressed in documents made available through the PEN (including this web page) are those of the relevant organisations and authors and do not necessarily reflect the views of the member institutions.

Publications

dd/06/2014
Correspondent Banking in Euro: bank clustering via self-organizing maps
Download
24/01/2013
How to measure the unsecured money market? The Eurosystem’s implementation and validation using TARGET2 data
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dd/mm/2012
Retail payments and economic growth
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18/12/2012
The Statistics and Timing of TARGET2 Interbank Payments
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dd/09/2012
The social and private costs of retail payment instruments: a European perspective
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27/09/2012
(In)efficient investment in financial market infrastructure: the role of governance structures
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27/09/2012
Auto-collateralization as a liquidity saving mechanism
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27/09/2012
Estimating the intraday liquidity risk of financial institutions: a Monte Carlo simulation approach
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27/09/2012
Is collateral becoming scarce? Evidence for the euro area
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11/09/2012
Derivatives Clearing, Default Risk, and Insurance
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dd/08/2012
Competition and Strategic Control of a Central Counterparty: When Lower Risk Increases Profit
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dd/06/2012
A comparison of Libor to other measures of bank borrowing costs
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dd/06/2012
The impact of Payment System Design on Tiering Incentives
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dd/05/2012
Payment System Design and Participant Operational Disruptions
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dd/04/2012
Imperfect Competition in the Interbank Market for Liquidity as a Rationale for Central Banking
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19/04/2012
Bank behaviour and risks in CHAPS following the collapse of Lehman Brothers
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dd/03/2012
ATM Fees, Pricing and Consumer Behavior: An Analysis of ATM Network Reform in Australia
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dd/03/2012
Clearing, counterparty risk and aggregate risk
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dd/03/2012
Implicit intraday interest rate in the UK unsecured overnight money market
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dd/02/2012
An Empirical Study of Trade Dynamics in the Fed Funds Market
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15/02/2012
Information insensitive securities: the true benefits of Central Counterparties
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01/02/2012
Central Counterparty Clearing: Incentives, Market Discipline and the Cost of Collateral
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dd/mm/2011
An agent-based model of payment systems
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dd/11/2011
Designing large value payment systems: An agent-based approach
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dd/10/2011
Consumer credit and payment cards
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dd/10/2011
Interchange fees in card payments
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26/09/2011
CDS as Insurance: Leaky Lifeboats in Stormy Seas
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dd/08/2011
Is this bank ill? The diagnosis of doctor TARGET2
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19/07/2011
Stressed, Not Frozen: The Federal Funds Market in the Financial Crisis
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16/07/2011
Inducing Agents To Report Hidden Trades: A Theory Of An Intermediary
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dd/06/2011
Intraday liquidity: risk and regulation
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dd/05/2011
Adopting, Using, and Discarding Paper and Electronic Payment Instruments: Variation by Age and Race
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dd/05/2011
Intraday two-part tariff in payment systems
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05/04/2011
The 2010 Federal Reserve Payments Study Noncash Payment Trends in the United States: 2006 – 2009
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dd/03/2011
Making OTC Derivatives Safe―A Fresh Look
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dd/03/2011
Operational problems in banks – Effects on the settlement of payments in Norges Bank
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18/02/2011
Liquidity Provision and Free-Riding in CHAPS
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19/01/2011
The microstructure of the money market before and after the financial crisis: a network perspective
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dd/12/2010
The Benefits to Government of Connecting Low-Income Households to an E-Payment System: An Analysis in India
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15/12/2010
Exploring an uncharted market: Evidence on the unsecured Swiss franc money market
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dd/10/2010
Monitoring the unsecured interbank money market using TARGET2 data
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dd/07/2010
Liquidity costs and tiering in large-value payment systems
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dd/07/2010
The sterling unsecured loan market during 2006–08: insights from network theory
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23/07/2010
Interbank overnight interest rates – gains from systemic importance
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03/07/2010
Precautionary Hoarding of Liquidity and Inter-Bank Markets: Evidence from the Sub-Prime Crisis
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dd/06/2010
Liquidity-saving mechanisms in collateral-based RTGS payment systems
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dd/05/2010
Liquidity saving in real-time gross settlement systems — an overview
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dd/04/2010
Collateral, Netting and Systemic Risk in the OTC derivatives Market
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dd/04/2010
Making Over-the-Counter Derivatives Safer: The Role of Central Counterparties
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dd/04/2010
The safety of cash and debit cards: a study on the perception and behavior of Dutch customers
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dd/03/2010
The Impact of Electronic Payments on Economic Growth
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16/03/2010
Does a Central Clearing Counterparty Reduce Counterparty Risk?
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dd/02/2010
Banks’ intraday liquidity management during operational outages: theory and evidence from the UK payment system
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dd/mm/2009
Simulation analyses and stress testing of payment networks
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dd/12/2009
Return to retail banking and payments
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dd/12/2009
SEPA, efficiency, and payment card competition
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dd/10/2009
Competing Technologies for Payments: ATMs, POS Terminals and the Demand for Currency
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dd/08/2009
Counterparty Risk, Impact on Collateral Flows, and Role for Central Counterparties
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21/07/2009
Network and eigenvalue analysis of financial transaction networks
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dd/05/2009
Financial institutions and Market across Countries and over Time - Data Analysis
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12/05/2009
The Topology of the Federal Funds Market
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11/01/2009
The Economics of Clearing in Derivatives Markets: Netting, Asymmetric Information, and the Sharing of Default Risks Through a Central Counterparty
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dd/mm/2008
Measuring Payment System Development
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dd/mm/2008
The Role of Interbank Markets in Monetary Policy: A Model with Rationing
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dd/09/2008
Changes in the Timing Distribution of Fedwire Funds Transfers
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dd/09/2008
Global Trends in Large-Value Payments
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dd/09/2008
Intraday Liquidity Management: A Tale of Games Banks Play
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dd/09/2008
The Timing and Funding of CHAPS Sterling Payments
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dd/08/2008
Exploring agent-based methods for the analysis of payment systems: A crisis model for StarLogo TNG
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dd/06/2008
A Model of Tiered Settlement Networks
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dd/04/2008
Financial Dependence and Industry Growth in Europe: Better Banks and Higher Productivity
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30/04/2008
The impact of reserves averaging on banks liquidity
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dd/03/2008
Transaction Pricing and the Adoption of Electronic Payments: A Cross-Country Comparison
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dd/mm/2007
Operational Risk and Contagion in the Austrian Large-Value Payment System ARTIS
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dd/mm/2007
Simulation studies of liquidity needs, risks and efficiency in payment networks
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dd/04/2007
Comparing the pre-settlement risk implications of alternative clearing arrangements
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21/03/2007
A network analysis of the Italian overnight money market
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dd/02/2007
Uncollateralized Overnight Loans Settled in LVTS
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dd/mm/2006
Payment instrument choice: The case of prepaid cards
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29/12/2006
Liquidity, Risk Concentration and Network Structure in the Austrian Real Time Interbank Settlement System
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13/11/2006
Trading strategies in the Italian interbank market
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dd/01/2006
Modelling the cross-border use of collateral in payment systems
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dd/07/2005
Systemic Risk in Alternative Payment System Designs
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dd/05/2005
Liquidity, risks and speed in payment and settlement systems – a simulation approach
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dd/mm/2004
Analysing the impact of operational incidents in large-value payment systems: A simulation approach
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dd/mm/2004
The relationship between the overnight interbank unsecured loan market and the CHAPS Sterling system
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dd/05/2004
Overnight Interbank Loan Markets
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30/04/2004
Central counterparty clearing: constructing a framework for evaluation of risks and benefits
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dd/mm/2003
The intraday liquidity management game
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dd/08/2003
Lending Relationships in the Interbank Market
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dd/11/2002
Liquidity Effects of the Events of September 11, 2001
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29/01/2002
Liquidity, gridlocks and bank failures in large value payment systems
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dd/08/2000
Systemic risk, interbank relations and liquidity provision by the Central Bank
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dd/07/2000
The Timing and Funding of Fedwire Funds Transfers
Download
dd/02/2000
Are Banks Risk Averse? Intraday Timing of Operations in the Interbank Market
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dd/11/1999
The Microstructure of the Federal Funds Market
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dd/mm/1998
An analysis of competitive externalities in gross settlement systems
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Conferences

Upcoming

Past

29th September 2014
to 2nd October 2014
Sibos 2014, Boston Convention & Exhibition Center, Boston, MA
Organisers: SWIFT
3-4 April 2014
"Economics of Payments VII" Call for papers
Organisers: Federal Reserve Bank of Boston
29-30 August 2013
"11th Simulator Seminar - Quantitative analysis of the payments and securities settlement systems"  Call for papers
Organisers: Bank of Finland, Helsinki
Summer 2013
21th International Conference on Computing in Economics and Finance (CEF 2013)
Organisers: The Society for Computational Economics
28 Feb - 1 Mar 2013
"Financial Inclusion Research Conference 2013"  Call for papers
Organisers: The SWIFT Institute, The Ash Center for Democratic Governance and Innovation and The Mossavar-Rahmani Center for Business and Government (Harvard Kennedy School)
10-12 July 2013
19th International Conference on Computing in Economics and Finance (CEF 2013) including an invited session titled "Payment methods, payment systems and interbank money market from a network perspective"
Organisers: The Society for Computational Economics and Simon Fraser University - Canada
11-12 September 2013
September 2013, four years after Pittsburgh: What has OTC derivatives reform achieved so far?
Organisers: ECB, Banque de France and Bank of England
21-22 Otocber 2013
"Retail payments at a crossroads: economics, strategies, and future policies" Call for papers
Organisers: Banque de France and ECB – Paris
9 October 2012
" Payment system monitoring indicators"
Organisers: Bank for International Settlements (BIS)
19-20 April 2012
"Financial Infrastructures Research Conference 2012" programme , call for papers
Organisers: De Nederlandsche Bank (DNB) and Tilburg University
24-25 May 2012
" Economics of Payments VI (call for papers) "
Organisers: The Bank of Canada
21-22 June 2010
"Payment Markets: Theory, Evidence and Policy"
Organisers: The University of Granada and the Federal Reserve Bank of Chicago
1-2 April 2010
"The Economics of Payments IV" (announcement)
Organisers: Federal Reserve Bank of New York and Federal Reserve Bank of Atlanta
2 October 2009
"Payment Systems in a Changing Financial Environment (call for papers)"
Organisers: Purdue University and Federal Reserve Bank of New York.
24-25 September 2009
"Recent Developments in Consumer Credit and Payments "
Organisers: Federal Reserve Bank of Philadelphia - Philadelphia.
25-26 May 2009
"Retail Payments: Integration and Innovation"
Organisers: European Central Bank and De Nederlandsche Bank - Frankfurt am Main.
14-15 May 2009
"Payments Pricing: Who Bears the Cost?"
Organisers: Federal Reserve Bank of Chicago - Chicago.
11-12 December 2008
"Risk Transfer: Challenges for Financial Institutions and Markets"
Organisers: CFS, CEPR and Deutsche Bundesbank - Frankfurt am Main.
19-20 November 2008
"Payment Economics: Theory and Policy"
Organisers: Organiser: Bank of Canada - Ottawa.
14-15 November 2008
"Norges Bank Research Conference on Payments Systems"
Organiser: Norges Bank - Oslo.
Special conference on retail payment systems.
9-10 June 2008
"Liquidity in Interdependent Transfer Systems"
Organisers: Banque de France and European Central Bank - Paris.
21-22 April 2008
"The Safety and Efficiency of Post-Trading Arrangements in Europe"
Organisers: European Central Bank and European Commission - Frankfurt am Main.
12-13 November 2007
"Payments and Monetary and Financial Stability"
Organisers: Bank of England and European Central Bank - Frankfurt am Main.
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