Real-time gross settlement and the costs of immediacy

Charles M. Kahn, William Roberds

Research output: Contribution to journalArticlepeer-review


Using a neoclassical monetary model, we investigate the welfare cost of a payment system that operates as a real-time gross settlement (RTGS) system. We illustrate how the cost of such systems ultimately derives from the credit constraints imposed by RTGS. The effects of these constraints can be undone if the central bank makes intraday credit freely available. If intraday credit is only available on a collateralized basis, however, RTGS will always impose a liquidity cost.

Original languageEnglish (US)
Pages (from-to)299-319
Number of pages21
JournalJournal of Monetary Economics
Issue number2
StatePublished - Apr 2001


  • E42
  • G21
  • Money
  • N20
  • Payments
  • Real-time gross settlement

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics


Dive into the research topics of 'Real-time gross settlement and the costs of immediacy'. Together they form a unique fingerprint.

Cite this