Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/241085 
Year of Publication: 
2020
Series/Report no.: 
Bank of Canada Staff Discussion Paper No. 2020-9
Publisher: 
Bank of Canada, Ottawa
Abstract: 
This paper presents simulation results for Canada's new large-value payments system: Lynx. We simulate the settlement process of Lynx using a large sample of payments observed in the current system (LVTS), taking the initial level of liquidity as given. We calculate the resulting liquidity usage, the payment delay and the shares of payments settled on a gross or net basis. The behaviour of participants (timing of payment submission) is assumed to remain the same as in LVTS. With an initial liquidity comparable to the collateral amount currently pledged in LVTS ($14.6 billion), Lynx FIFO Bypass would result in 28 minutes of average weighted delay and $17.3 billion of liquidity usage (the sum of intraday maximum net debit positions). Given this configuration, on average, $1.9 billion would be needed to clear nonurgent payments delayed until the end of the day, equivalent to 4.1 percent of payment value and 0.06 percent of volume. Doubling the amount of initial liquidity (to $29.3 billion) would result in 12 minutes of weighted delay. This basic configuration of Lynx requires a higher level of liquidity than LVTS and a plain-vanilla RTGS with pooled liquidity.
Subjects: 
Payment clearing and settlement systems
Financial system regulation and policies
Financial services
JEL: 
C
C5
E42
E58
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.