Analysis Of The Participants’in Chinese High Value Payment System Liquidity Management Behavior

With the rapid development of economy, especially in the2001after entry into the WTO, economic communications between each enterprise and between different countries or regions is increasing. Business trade has become increasingly frequent, the demand for capital increase, and at the same time, the requirements of the payment become more and more necessary. Chinese High Value Payment System (HVPS) as the important application system and components of the China National Advanced Payment System (CNAPS) plays an important role in payments and settlement system in our country. HVPS provides for the banking financial institutions and financial market with a safer, more efficient and more accurate payment and settlement system. In October2000, the people’s bank of China decided to start the construction of Chinese High Value Payment System (HVPS). The trial run chooses in Beijing and wuhan, and then spread in the whole nation step by step. HVPS overall completed in June2005. Banks as the participants of HVPS should grasp the opportunity of the payment system reformation, but this not only makes payment more efficient and convenient, but also brings new challenges to banks. However, as to the present situation, the domestic and overseas research on participants’liquidity management in large-value real-time gross payment system is still not in-depth. Therefore, this paper tries to research into it.This paper mainly discusses the following two problems:one is for Banks, exactly how much storage liquidity in the account of HVPS is optimal decision; on the other hand is a bank as participate of HVPS, and participates’liquidity management behavior will influence the efficiency of HVPS. If the balance of the participants settlement account in HVPS is not appropriate, this will bring to participants opportunity cost or financing costs. The insufficient liquidity in participants will obviously expand to the whole system, and HVPS will be drop in liquidity crisis. In this paper a new method to use to set up a new model, open up research bank liquidity management new ideas. There are two methods used in this paper:economic model establishment and simulated. The simulation uses the Bank of Finland-Payment System Simulation. With the quantitative and qualitative analysis, these two kinds of research methods will be perfect. The former can be very good in theory research of bank liquidity management, and the later is a simulation of HVPS. The theory research does a perfect and added to make the paper more vivid, more persuasive.The paper is divided into five parts. First is introduction, opening the paper.Second part is theory, which will be used in next. Such as the research situation at home and abroad, the development direction of the research, and introduce HVPS in China. From the HVPS building and operating, the development of the system presents a rising trend, and develops fast.The third part is the system participants’liquidity qualitative analysis. Liquidity management usually involves cost, and the cost is the main reason of the commercial Banks to minimize the liquidity. Through the analysis, we can conclude that liquidity mainly depends on the deposit reserve opportunity cost, when opportunity cost equals the lack of liquidity cost, the balance of the liquidity for the best. One the other side, author analyses internal queue management of the participants of HVPS, and participants’behavior in game theory.The fourth part is simulation analysis with Finland bank payment system simulation. According the simulation, we can draw the conclusion:balance of the participants’fund settlement account is basic reasonable, and participants’liquidity management to the system has no influence in the short term. The participants in the liquidity management should also pay attention to the following aspects:First of all, to form good adjustment mechanism, banks have excess liquidity transfer to profit business in time. Secondly, the large amount of payment will be split into the smaller, so that it can improve the efficiency of the system, at the same time also save liquidity. Finally, before sending payment, the participants should anticipate the balance. This not only increases the efficiency of large payment system, and also reduced the settlement delay.The fifth part is the conclusion, and points out that innovation and insufficient.