A Model of Tiered Settlement Networks

Material TypeArticleLanguageEnglish
TitleA Model of Tiered Settlement Networks Author(S)JAMES CHAPMAN (Author)
Abstract  Payment and settlement networks typically involve various tiers of intermediation. This paper develops a model of settlement system to study the endogenous structure of tiered settlement networks, and the welfare consequences of clearing agent (CA) failure. We offer two explanations for tiering: private information regarding participant’s credit worthiness and economies of scale in the participation in the settlement system. ...Paginationp 327-348
Journal TitleJournal of Money, Credit, and Banking  
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