Central Banks and the Payment System

  • David B. Humphrey


Central bank involvement in the payment system has traditionally focused on insulating the real economy from disruptions in the banking system. Since the banking system is also the payment system, activities such as bank examination, discount window lending, deposit insurance, capital requirements, and recent efforts to reduce settlement failure risks on large value payment networks all contribute to minimising payment system disruptions. The purpose of this paper is to outline seven areas associated with the payment system which deserve, and in some countries have received, greater central bank attention. These areas primarily concern payment system cost, operating efficiency, and access.


Central Bank Credit Card Payment System Cash Holding Resale Price Maintenance 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. Bank for International Settlements (BIS) (various years), Statistics on Payment Systems in the Group of Ten Countries, Basle.Google Scholar
  2. Cruickshank, D. (2000), Competition in UK Banking: A Report to the Chancellor of the Exchequer, London.Google Scholar
  3. Department of Finance Canada (1999), Reforming Canada’s Financial Services Sector: A Framework for the Future, Ottawa.Google Scholar
  4. European Monetary Institute (EMI) (various years), Payment Systems in the European Union, Frankfurt.Google Scholar
  5. Federal Reserve Bank of New York (1987), A Study of Large-Dollar Payment Flows Through CHIPS and Fedwire.Google Scholar
  6. Flatraaker, D-I, and P. Robinson (1995), Income, Costs, and Pricing in the Payment System, Norges Bank Economic Bulletin 66, 321–32.Google Scholar
  7. Food Marketing Institute (1998), A Retailer’s Guide to Electronic Payment System Costs, Research Department, Washington, D.C.Google Scholar
  8. Henckel, T., A. Ize and A. Kovanen (1999), Central Banking Without Central Bank Money, International Monetary Fund Working Paper W/99/92.Google Scholar
  9. Hancock, D., D. Humphrey and J. Wilcox (1999), Cost Reductions in Electronic Payments: The Roles of Consolidation, Economies of Scale, and Technical Change, Journal of Banking and Finance 23, 391–421.CrossRefGoogle Scholar
  10. Humphrey, D., M. Kim and B. Vale (forthcoming), Realizing the Gains from Electronic Pay- ments: Costs, Pricing, and Payment Choice, Journal of Money, Credit, and Banking.Google Scholar
  11. Humphrey, D., L. Pulley and J. Vesala (2000), The Check’s in the Mail: Why the U.S. Lags in the Adoption of Cost-Saving Electronic Payments, Journal of Financial Services Research 17, 17–39.CrossRefGoogle Scholar
  12. National Automated Clearing House Association (NACHA) (1999), Corporate Cost Consideration: Check vs. ACH, from facts and statistics on Scholar
  13. Rogoff, K. (1998), Blessing or Curse? Foreign and Underground Demand for Euro Notes, Economic Policy 26, 263–290.Google Scholar
  14. Snellman, J., J. Vesala and D. Humphrey (2000), Substitution of Noncash Payment Instruments for Cash in Europe, Discussion Paper, Bank of Finland.Google Scholar
  15. Wells, K. (1996), Are Checks Overused?, Federal Reserve Bank of Minneapolis Quarterly Review 20, 2–12.Google Scholar

Copyright information

© Springer Science+Business Media New York 2001

Authors and Affiliations

  • David B. Humphrey
    • 1
  1. 1.Florida State UniversityUSA

Personalised recommendations