Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/297411 
Year of Publication: 
2023
Series/Report no.: 
Bank of Canada Staff Working Paper No. 2023-26
Publisher: 
Bank of Canada, Ottawa
Abstract: 
Using detailed data from Canada's new high-value payment system (HVPS), we show how participants of the system save liquidity by exploiting the new gridlock resolution arrangement. These observed behaviors are consistent with the equilibrium of a "gridlock game" that captures the key incentives that participants face in the system. The findings have important implications for the design of HVPSs and shed light on financial institutions' liquidity preference.
Subjects: 
Financial institutions
Payment clearing and settlement systems
JEL: 
E42
E58
G21
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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