The Central Bank’s Role in the Payment System: Legal and Policy Aspects

Current Developments in Monetary and Financial Law (2008 International Monetary Fund), pg. 445-470, 2008

33 Pages Posted: 5 Feb 2010

See all articles by Christian A. Johnson

Christian A. Johnson

Widener University - Commonwealth Law School

Robert S. Steigerwald

Federal Reserve Bank of Chicago

Date Written: 2008

Abstract

The paper starts with a brief overview of the payment system and the roles central banks have traditionally played as payment intermediaries. In particular, it discusses interbank settlement and the role of bank money as a settlement asset. The paper shows that the concept of settlement finality, which has both legal and risk management dimensions, is a key attribute of any form of payment and is not a unique attribute of payments made through a central bank.

Keywords: central bank, payment system, clearing, interbank settlement, interbank payment

JEL Classification: E5, E58, G18, N20

Suggested Citation

Johnson, Christian A. and Steigerwald, Robert S., The Central Bank’s Role in the Payment System: Legal and Policy Aspects (2008). Current Developments in Monetary and Financial Law (2008 International Monetary Fund), pg. 445-470, 2008, Available at SSRN: https://ssrn.com/abstract=1544034

Christian A. Johnson (Contact Author)

Widener University - Commonwealth Law School ( email )

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Robert S. Steigerwald

Federal Reserve Bank of Chicago ( email )

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Chicago, IL 60604
United States
(312) 322-2414 (Phone)
(312) 322-5943 (Fax)

HOME PAGE: http://www.chicagofed.org/financial_markets_group/fmg_preview.cfm?autID=427

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