Payment Systems, Inside Money and Financial Intermediation
This paper assesses the impact of introducing an efficient payment system on the amount of credit provided by the banking system. Two channels are investigated. First, innovations in wholesale payments technology enhance the security and speed of d...
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| Format: | Policy Research Working Paper |
| Language: | English |
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2012
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| Online Access: | http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20101013145659 http://hdl.handle.net/10986/3927 |
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okr-10986-3927 |
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| recordtype |
oai_dc |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
ACCESSION COUNTRIES ACCOUNT MANAGEMENT ACCOUNTING ACCOUNTING PRACTICES AMOUNT OF CREDIT ASYMMETRIC INFORMATION BALANCE SHEET BANK CREDIT BANK DEPOSITS BANK FAILURES BANK LENDING BANK OF ENGLAND BANK OF LATVIA BANK PAYMENTS BANK REGULATION BANKING ASSETS BANKING CRISES BANKING LAWS BANKING REFORM BANKING SECTOR BANKING SECTOR ASSETS BANKING SERVICES BANKING SYSTEM BANKING SYSTEM ASSETS BANKING SYSTEMS BANKS BARTER BIASES BOND BORROWING BORROWING COSTS BUDGET CONSTRAINTS BUSINESS CYCLES CASH PAYMENT CASH PAYMENTS CENTRAL BANK CENTRAL BANK BILLS CENTRAL BANKS CHECKS CLEARING HOUSE COLLATERALIZATION COMMERCIAL BANKS CONSOLIDATION CONSOLIDATIONS CONSUMPTION EXPENDITURES CONTROL VARIABLES CORE DEPOSITS COST OF CREDIT COUNTRY DUMMIES CREDIT ALLOCATION CREDIT BOOM CREDIT CRUNCH CREDIT DECISIONS CREDIT EXPANSION CREDIT GROWTH CREDIT RISKS CREDIT TRANSFERS CURRENCY CURRENCY BOARD CURRENCY BOARD ARRANGEMENT CURRENCY COMPOSITION CURRENCY HOLDING CURRENCY TRANSACTIONS CURRENT ACCOUNT CURRENT ACCOUNTS DEBT DEBT LIABILITIES DEMAND DEPOSITS DEPENDENT DEPOSIT DEPOSITS DEPRESSION DESCRIPTIVE STATISTICS DIRECTED CREDIT DOMESTIC BANKING DOMESTIC BANKING SYSTEM DOMESTIC CREDIT DOMESTIC CURRENCY ECONOMIC ACTIVITY ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC POLICY EESTI PANK ELECTRONIC FORM ELECTRONIC PAYMENTS ELECTRONIC TRANSFERS EMERGING MARKET EMERGING MARKET ECONOMIES ENTREPRENEURS ERROR TERM ERROR TERMS EXPENDITURE EXPOSURE FEDERAL DEPOSIT INSURANCE FEDERAL RESERVE FEDERAL RESERVE SYSTEM FINANCIAL INTERMEDIATION FINANCIAL STUDIES FOREIGN ASSETS FOREIGN BANKS FOREIGN CURRENCY FOREIGN CURRENCY DEPOSITS FOREIGN DIRECT INVESTMENT FOREIGN EXCHANGE FOREIGN EXCHANGE RESERVES FOREIGN OWNERSHIP GOVERNMENT EXPENDITURE GOVERNMENT EXPENDITURES GOVERNMENT OWNERSHIP GOVERNMENT SECURITIES GOVERNMENT SECURITIES MARKET GOVERNMENT SPENDING GROSS DOMESTIC PRODUCT GROSS SETTLEMENT GROSS SETTLEMENT SYSTEM GROSS SETTLEMENT SYSTEMS GUARANTEE FUND HIGH-INCOME COUNTRIES HOLDING HOLDINGS HOUSEHOLDS HUMAN CAPITAL IMPORT INFLATION INFLATION RATE INFORMATION ON BORROWERS INFORMATION TECHNOLOGY INSTRUMENT INTERBANK MARKETS INTEREST RATE INTEREST RATE CEILINGS INTEREST RATES INTERNATIONAL BANK INTERNATIONAL SETTLEMENTS INVESTING LEGAL FRAMEWORK LEGISLATION LIQUID ASSETS LIQUIDITY LIQUIDITY MANAGEMENT LIQUIDITY PREFERENCE LOAN LOAN COMMITMENTS LOAN MONITORING LOSS-SHARING ARRANGEMENTS MAKING PAYMENTS MARKET ECONOMY MONETARY FUND MONETARY POLICY MONETARY STABILITY MONEY DEMAND MONEY MARKET MONEY MARKET OPERATIONS MONEY SUPPLY NATIONAL BANK OF HUNGARY NATIONAL BANK OF SLOVAKIA NEGATIVE SHOCKS NET SETTLEMENT NOMINAL INTEREST RATE NOMINAL INTEREST RATES OPEN MARKET OPEN MARKET OPERATIONS OPPORTUNITY COST PAYMENT ORDERS PAYMENT SERVICES PAYMENT SYSTEM PAYMENT SYSTEMS PAYMENTS SYSTEM PAYMENTS SYSTEMS PLEDGES POLITICAL ECONOMY PORTFOLIO PRIVATE BANKS PRIVATE CREDIT PRIVATE ENTERPRISES PRIVATIZATION PRUDENTIAL SUPERVISION PUBLIC BANKS PUBLIC SPENDING RATE OF GROWTH REGRESSION ANALYSIS REPO REPOS RESERVE REQUIREMENT RESERVE REQUIREMENTS RESERVES RETURN ROLE OF BANKS SECTOR REFORM SECURITIES SERIAL CORRELATION SETTLEMENT SETTLEMENT PROCEDURE SETTLEMENT RISK SETTLEMENT SYSTEM SETTLEMENT SYSTEMS SHAREHOLDERS SOFT BUDGET CONSTRAINT SOFT BUDGET CONSTRAINTS SOLVENCY STRUCTURAL REFORM STRUCTURAL REFORMS SUPERVISORY FRAMEWORK SUPERVISORY POWER SUPPLY OF CREDIT SUPPLY SHOCKS SYSTEMIC RISK TAX TERM DEPOSITS TOTAL DEPOSITS TRANSACTION TRANSITION ECONOMIES TRANSMISSION MECHANISMS TRANSPORT TREASURY TREASURY BILL TREASURY BILL RATE UNCERTAINTY UNION VALUE PAYMENT SYSTEM |
| spellingShingle |
ACCESSION COUNTRIES ACCOUNT MANAGEMENT ACCOUNTING ACCOUNTING PRACTICES AMOUNT OF CREDIT ASYMMETRIC INFORMATION BALANCE SHEET BANK CREDIT BANK DEPOSITS BANK FAILURES BANK LENDING BANK OF ENGLAND BANK OF LATVIA BANK PAYMENTS BANK REGULATION BANKING ASSETS BANKING CRISES BANKING LAWS BANKING REFORM BANKING SECTOR BANKING SECTOR ASSETS BANKING SERVICES BANKING SYSTEM BANKING SYSTEM ASSETS BANKING SYSTEMS BANKS BARTER BIASES BOND BORROWING BORROWING COSTS BUDGET CONSTRAINTS BUSINESS CYCLES CASH PAYMENT CASH PAYMENTS CENTRAL BANK CENTRAL BANK BILLS CENTRAL BANKS CHECKS CLEARING HOUSE COLLATERALIZATION COMMERCIAL BANKS CONSOLIDATION CONSOLIDATIONS CONSUMPTION EXPENDITURES CONTROL VARIABLES CORE DEPOSITS COST OF CREDIT COUNTRY DUMMIES CREDIT ALLOCATION CREDIT BOOM CREDIT CRUNCH CREDIT DECISIONS CREDIT EXPANSION CREDIT GROWTH CREDIT RISKS CREDIT TRANSFERS CURRENCY CURRENCY BOARD CURRENCY BOARD ARRANGEMENT CURRENCY COMPOSITION CURRENCY HOLDING CURRENCY TRANSACTIONS CURRENT ACCOUNT CURRENT ACCOUNTS DEBT DEBT LIABILITIES DEMAND DEPOSITS DEPENDENT DEPOSIT DEPOSITS DEPRESSION DESCRIPTIVE STATISTICS DIRECTED CREDIT DOMESTIC BANKING DOMESTIC BANKING SYSTEM DOMESTIC CREDIT DOMESTIC CURRENCY ECONOMIC ACTIVITY ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC POLICY EESTI PANK ELECTRONIC FORM ELECTRONIC PAYMENTS ELECTRONIC TRANSFERS EMERGING MARKET EMERGING MARKET ECONOMIES ENTREPRENEURS ERROR TERM ERROR TERMS EXPENDITURE EXPOSURE FEDERAL DEPOSIT INSURANCE FEDERAL RESERVE FEDERAL RESERVE SYSTEM FINANCIAL INTERMEDIATION FINANCIAL STUDIES FOREIGN ASSETS FOREIGN BANKS FOREIGN CURRENCY FOREIGN CURRENCY DEPOSITS FOREIGN DIRECT INVESTMENT FOREIGN EXCHANGE FOREIGN EXCHANGE RESERVES FOREIGN OWNERSHIP GOVERNMENT EXPENDITURE GOVERNMENT EXPENDITURES GOVERNMENT OWNERSHIP GOVERNMENT SECURITIES GOVERNMENT SECURITIES MARKET GOVERNMENT SPENDING GROSS DOMESTIC PRODUCT GROSS SETTLEMENT GROSS SETTLEMENT SYSTEM GROSS SETTLEMENT SYSTEMS GUARANTEE FUND HIGH-INCOME COUNTRIES HOLDING HOLDINGS HOUSEHOLDS HUMAN CAPITAL IMPORT INFLATION INFLATION RATE INFORMATION ON BORROWERS INFORMATION TECHNOLOGY INSTRUMENT INTERBANK MARKETS INTEREST RATE INTEREST RATE CEILINGS INTEREST RATES INTERNATIONAL BANK INTERNATIONAL SETTLEMENTS INVESTING LEGAL FRAMEWORK LEGISLATION LIQUID ASSETS LIQUIDITY LIQUIDITY MANAGEMENT LIQUIDITY PREFERENCE LOAN LOAN COMMITMENTS LOAN MONITORING LOSS-SHARING ARRANGEMENTS MAKING PAYMENTS MARKET ECONOMY MONETARY FUND MONETARY POLICY MONETARY STABILITY MONEY DEMAND MONEY MARKET MONEY MARKET OPERATIONS MONEY SUPPLY NATIONAL BANK OF HUNGARY NATIONAL BANK OF SLOVAKIA NEGATIVE SHOCKS NET SETTLEMENT NOMINAL INTEREST RATE NOMINAL INTEREST RATES OPEN MARKET OPEN MARKET OPERATIONS OPPORTUNITY COST PAYMENT ORDERS PAYMENT SERVICES PAYMENT SYSTEM PAYMENT SYSTEMS PAYMENTS SYSTEM PAYMENTS SYSTEMS PLEDGES POLITICAL ECONOMY PORTFOLIO PRIVATE BANKS PRIVATE CREDIT PRIVATE ENTERPRISES PRIVATIZATION PRUDENTIAL SUPERVISION PUBLIC BANKS PUBLIC SPENDING RATE OF GROWTH REGRESSION ANALYSIS REPO REPOS RESERVE REQUIREMENT RESERVE REQUIREMENTS RESERVES RETURN ROLE OF BANKS SECTOR REFORM SECURITIES SERIAL CORRELATION SETTLEMENT SETTLEMENT PROCEDURE SETTLEMENT RISK SETTLEMENT SYSTEM SETTLEMENT SYSTEMS SHAREHOLDERS SOFT BUDGET CONSTRAINT SOFT BUDGET CONSTRAINTS SOLVENCY STRUCTURAL REFORM STRUCTURAL REFORMS SUPERVISORY FRAMEWORK SUPERVISORY POWER SUPPLY OF CREDIT SUPPLY SHOCKS SYSTEMIC RISK TAX TERM DEPOSITS TOTAL DEPOSITS TRANSACTION TRANSITION ECONOMIES TRANSMISSION MECHANISMS TRANSPORT TREASURY TREASURY BILL TREASURY BILL RATE UNCERTAINTY UNION VALUE PAYMENT SYSTEM Merrouche, Ouarda Nier, Erlend Payment Systems, Inside Money and Financial Intermediation |
| geographic_facet |
The World Region The World Region |
| relation |
Policy Research working paper ; no. WPS 5445 |
| description |
This paper assesses the impact of
introducing an efficient payment system on the amount of
credit provided by the banking system. Two channels are
investigated. First, innovations in wholesale payments
technology enhance the security and speed of deposits as a
payment medium for customers and therefore affect the split
between holdings of cash and the holdings of deposits that
can be intermediated by the banking system. Second,
innovations in wholesale payments technology help establish
well-functioning interbank markets for end-of-day funds,
which reduces the need for banks to hold excess reserves.
The authors examine these links empirically using payment
system reforms in Eastern European countries as a
laboratory. The analysis finds evidence that reforms led to
a shift away from cash in favor of demand deposits and that
this in turn enabled a prolonged credit expansion in the
sample countries. By contrast, while payment system
innovations also led to a reduction in excess reserves in
some countries, this effect was not causal for the credit
boom observed in these countries. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Merrouche, Ouarda Nier, Erlend |
| author_facet |
Merrouche, Ouarda Nier, Erlend |
| author_sort |
Merrouche, Ouarda |
| title |
Payment Systems, Inside Money and Financial Intermediation |
| title_short |
Payment Systems, Inside Money and Financial Intermediation |
| title_full |
Payment Systems, Inside Money and Financial Intermediation |
| title_fullStr |
Payment Systems, Inside Money and Financial Intermediation |
| title_full_unstemmed |
Payment Systems, Inside Money and Financial Intermediation |
| title_sort |
payment systems, inside money and financial intermediation |
| publishDate |
2012 |
| url |
http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20101013145659 http://hdl.handle.net/10986/3927 |
| _version_ |
1764389059321397248 |
| spelling |
okr-10986-39272021-04-23T14:02:13Z Payment Systems, Inside Money and Financial Intermediation Merrouche, Ouarda Nier, Erlend ACCESSION COUNTRIES ACCOUNT MANAGEMENT ACCOUNTING ACCOUNTING PRACTICES AMOUNT OF CREDIT ASYMMETRIC INFORMATION BALANCE SHEET BANK CREDIT BANK DEPOSITS BANK FAILURES BANK LENDING BANK OF ENGLAND BANK OF LATVIA BANK PAYMENTS BANK REGULATION BANKING ASSETS BANKING CRISES BANKING LAWS BANKING REFORM BANKING SECTOR BANKING SECTOR ASSETS BANKING SERVICES BANKING SYSTEM BANKING SYSTEM ASSETS BANKING SYSTEMS BANKS BARTER BIASES BOND BORROWING BORROWING COSTS BUDGET CONSTRAINTS BUSINESS CYCLES CASH PAYMENT CASH PAYMENTS CENTRAL BANK CENTRAL BANK BILLS CENTRAL BANKS CHECKS CLEARING HOUSE COLLATERALIZATION COMMERCIAL BANKS CONSOLIDATION CONSOLIDATIONS CONSUMPTION EXPENDITURES CONTROL VARIABLES CORE DEPOSITS COST OF CREDIT COUNTRY DUMMIES CREDIT ALLOCATION CREDIT BOOM CREDIT CRUNCH CREDIT DECISIONS CREDIT EXPANSION CREDIT GROWTH CREDIT RISKS CREDIT TRANSFERS CURRENCY CURRENCY BOARD CURRENCY BOARD ARRANGEMENT CURRENCY COMPOSITION CURRENCY HOLDING CURRENCY TRANSACTIONS CURRENT ACCOUNT CURRENT ACCOUNTS DEBT DEBT LIABILITIES DEMAND DEPOSITS DEPENDENT DEPOSIT DEPOSITS DEPRESSION DESCRIPTIVE STATISTICS DIRECTED CREDIT DOMESTIC BANKING DOMESTIC BANKING SYSTEM DOMESTIC CREDIT DOMESTIC CURRENCY ECONOMIC ACTIVITY ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC POLICY EESTI PANK ELECTRONIC FORM ELECTRONIC PAYMENTS ELECTRONIC TRANSFERS EMERGING MARKET EMERGING MARKET ECONOMIES ENTREPRENEURS ERROR TERM ERROR TERMS EXPENDITURE EXPOSURE FEDERAL DEPOSIT INSURANCE FEDERAL RESERVE FEDERAL RESERVE SYSTEM FINANCIAL INTERMEDIATION FINANCIAL STUDIES FOREIGN ASSETS FOREIGN BANKS FOREIGN CURRENCY FOREIGN CURRENCY DEPOSITS FOREIGN DIRECT INVESTMENT FOREIGN EXCHANGE FOREIGN EXCHANGE RESERVES FOREIGN OWNERSHIP GOVERNMENT EXPENDITURE GOVERNMENT EXPENDITURES GOVERNMENT OWNERSHIP GOVERNMENT SECURITIES GOVERNMENT SECURITIES MARKET GOVERNMENT SPENDING GROSS DOMESTIC PRODUCT GROSS SETTLEMENT GROSS SETTLEMENT SYSTEM GROSS SETTLEMENT SYSTEMS GUARANTEE FUND HIGH-INCOME COUNTRIES HOLDING HOLDINGS HOUSEHOLDS HUMAN CAPITAL IMPORT INFLATION INFLATION RATE INFORMATION ON BORROWERS INFORMATION TECHNOLOGY INSTRUMENT INTERBANK MARKETS INTEREST RATE INTEREST RATE CEILINGS INTEREST RATES INTERNATIONAL BANK INTERNATIONAL SETTLEMENTS INVESTING LEGAL FRAMEWORK LEGISLATION LIQUID ASSETS LIQUIDITY LIQUIDITY MANAGEMENT LIQUIDITY PREFERENCE LOAN LOAN COMMITMENTS LOAN MONITORING LOSS-SHARING ARRANGEMENTS MAKING PAYMENTS MARKET ECONOMY MONETARY FUND MONETARY POLICY MONETARY STABILITY MONEY DEMAND MONEY MARKET MONEY MARKET OPERATIONS MONEY SUPPLY NATIONAL BANK OF HUNGARY NATIONAL BANK OF SLOVAKIA NEGATIVE SHOCKS NET SETTLEMENT NOMINAL INTEREST RATE NOMINAL INTEREST RATES OPEN MARKET OPEN MARKET OPERATIONS OPPORTUNITY COST PAYMENT ORDERS PAYMENT SERVICES PAYMENT SYSTEM PAYMENT SYSTEMS PAYMENTS SYSTEM PAYMENTS SYSTEMS PLEDGES POLITICAL ECONOMY PORTFOLIO PRIVATE BANKS PRIVATE CREDIT PRIVATE ENTERPRISES PRIVATIZATION PRUDENTIAL SUPERVISION PUBLIC BANKS PUBLIC SPENDING RATE OF GROWTH REGRESSION ANALYSIS REPO REPOS RESERVE REQUIREMENT RESERVE REQUIREMENTS RESERVES RETURN ROLE OF BANKS SECTOR REFORM SECURITIES SERIAL CORRELATION SETTLEMENT SETTLEMENT PROCEDURE SETTLEMENT RISK SETTLEMENT SYSTEM SETTLEMENT SYSTEMS SHAREHOLDERS SOFT BUDGET CONSTRAINT SOFT BUDGET CONSTRAINTS SOLVENCY STRUCTURAL REFORM STRUCTURAL REFORMS SUPERVISORY FRAMEWORK SUPERVISORY POWER SUPPLY OF CREDIT SUPPLY SHOCKS SYSTEMIC RISK TAX TERM DEPOSITS TOTAL DEPOSITS TRANSACTION TRANSITION ECONOMIES TRANSMISSION MECHANISMS TRANSPORT TREASURY TREASURY BILL TREASURY BILL RATE UNCERTAINTY UNION VALUE PAYMENT SYSTEM This paper assesses the impact of introducing an efficient payment system on the amount of credit provided by the banking system. Two channels are investigated. First, innovations in wholesale payments technology enhance the security and speed of deposits as a payment medium for customers and therefore affect the split between holdings of cash and the holdings of deposits that can be intermediated by the banking system. Second, innovations in wholesale payments technology help establish well-functioning interbank markets for end-of-day funds, which reduces the need for banks to hold excess reserves. The authors examine these links empirically using payment system reforms in Eastern European countries as a laboratory. The analysis finds evidence that reforms led to a shift away from cash in favor of demand deposits and that this in turn enabled a prolonged credit expansion in the sample countries. By contrast, while payment system innovations also led to a reduction in excess reserves in some countries, this effect was not causal for the credit boom observed in these countries. 2012-03-19T18:42:18Z 2012-03-19T18:42:18Z 2010-10-01 http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20101013145659 http://hdl.handle.net/10986/3927 English Policy Research working paper ; no. WPS 5445 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank Publications & Research :: Policy Research Working Paper The World Region The World Region |