The Analysis Of Liquidity Risk Of Large Value Payment System

In today’s world market economy, the payment system from a country or a region presents the most important part of financial infrastructure. Its composition mainly includes three aspects, namely the capital transferring rules, way of realizing the capital’s payment and settlement, the related financial institutions. It can be said that the payment system is the macro arrangement of debt repayment and the transfer of funds in the financial system. Financial activities in the financial system can be expressed in capital circulation between the different departments. Payment system help financial institutions achieve debt repayment and capital payment, so it is the blood circulation system of the financial operation, the backbone of the financial core facilities, the core elements of financial services.From the beginning of the seventies of the last century, more and more countries gradually realized the importance of constructing and maintaining the security and stability of the payment system. More and more central banks and financial services organizations pay attention to the payment system, and they attach great importance to the construction of the stability of the payment system. If the finance is to be said as the pillars of the modern economy, the payment system can be said as the "blood" of the financial system, so it can transport "blood" for the whole community. Due to its financial core position in the national economic operation, the security and stability of payment systems is even more important.Payment system risk refers to the uncertainty of the payment system loss or not the normal operation due to various factors. Payment system risk may arise with every aspect of the payment system, and may be arising or resulting from the participants, may also be included with the payment system mode of operation, may be from the surrounding environment or the relevant market. Regardless of where these risks come from, the loss and communication of risk will cause payment system not operating normally, and then spread to all kinds of trading activities in the economic through the payment system network. In order to control and prevent the payment system risk, we should make the manifestations of risk on the basis of risk classification, and develop targeted preventive measures.Different scholars have different methods of payment system risk classification, so payment system risk is subdivided into many types. In general, the more common classification is divided into liquidity risk, credit risk, operational risk, system risk and legal risk, but some scholars believe that beyond the five categories the moral hazard risk and foreign exchange risk should be added.In these different risk categories, Liquidity risk is the most basic type of micro-level risks, it refers to payment system participants not having sufficient funds to settle the payment within the time limit in the payment system, causing the loss., I can draw the performance.causes characteristics of payment system liquidity risk,based on its concept. Suggestions on risk management can be formulated upon the causes of liquidity risk. In general, the causes of liquidity risk can be divided into external and internal factors. The external one refers to the designing mechanisms of payment system liquidity, while the internal one is upon the system participants.From the external point of view, in China’s large-value payment system, the liquidity mechanism design and control of liquidity risk is imperfect, so we should learn from some of the advanced developed payment system, such as the FEDWIRE, CHIPS and SIC. On liquidity risk management they have the world’s leading technology or mechanism. FED WIRE allows mobility of overdraft, set the overdraft limit and duration of mortgage-backed securities vouchers. CHIPS offer s participants a certain credit limit, and requests payment instructions to store in the account before the payment. SIC uses no overdraft mechanism, so the insufficient payment should wait in line, resulting in additional interest payment from delaying sender. Their advanced experience is worth learning.From the internal point of view, the liquidity of system participants is not sufficient, causing the system to suffer liquidity risk. The financial indicators of system participants can reflect the operating conditions and liquidity management capabilities, so these indicators affect the companies’ short-term solvency, maybe causing a potential liquidity risk probability. Thus, the use of financial indicators of large-value payment system participants of the panel data regression analysis measures the potential for large-value payment system liquidity risk probability. After a test of the validity of the model, I use the model to evaluate the probability level of the potential system risks, paying attention to conclusions.This thesis is divided into six chapters.The first chapter is an introduction, including three sections. Section Ⅰ introduces the background and significance of this thesis. Section Ⅱ describes the research ideas and research methods. Section Ⅲ presents the analysis of papers innovation and the existence of the inadequacies.The second chapter will summarize the research literature for payment system risk at home and abroad and then make the formation of a literature review. This chapter will be divided into the domestic aspect of previous researches and the foreign one, while the domestic research is divided into the qualitative and quantitative studies. There are more papers on qualitative research in China, so they are divided into several parts, namely introducing the relevant experience of the foreign payment system risk, a different classification of large-value payment system risk, a variety of single the risk analysis, and another qualitative research on payment system risk.The third chapter will analyze the relevant concepts of large-value payment systems and its liquidity risk, divided into three. Section Ⅰ introduces the concept of payment and payment system. Section Ⅱ analyzes the definition of large-value payment system and its members. Section Ⅲ presents the main risks facing the large-value payment system, especially the liquidity risk.The fourth chapter will compare the liquidity risk management and control mechanisms of four important large-value payment systems, and analyze what the large-value payment system in China can learn from abroad, including four sections. Section Ⅰ will introduce the U.S. Federal Reserve System funds transfer system FEDWIRE. Section Ⅱ describes the New York Clearing House banks interbank payment system, CHIPS. Section Ⅲ analyzes the Swiss Interbank Clearing System SIC. Section Ⅳ presents the China’s National advanced Payment System CNAPS.The fifth chapter is the empirical part of this thesis. The potential will be China’s large-value payment system liquidity risk assessment of reference for foreign liquidity risk index system model to the introduction of indicators, through Eviews measurement software to the potential liquidity The risk of regression analysis, after the test to confirm the validity of the model, and then use the model to estimate the risk trend analysis on the different participants in the system and draw the relevant empirical results.The last chapter will synthesize and summarize the key findings of the above, drawing the main conclusions of this thesis, and make some suggestions to the supervisor and the participants of CNAPS on liquidity management.The innovation of this thesis is that the advanced experience of several prominent international payment systems on liquidity risk management is discussed on the basis of the literature review, and then it select the relevant indicator variables to make the regression analysis with the probability of potential risks of large-value payment system, finally putting forward specific proposals to the system participants and system regulators. However, due to the limited ability of the author’s academic capacity, theoretical depth and empirical value, the paper is still there. I only hope that the thesis could contribute its modest to the research on related fields.