Norges Bank

Operational problems in banks – Effects on the settlement of payments in Norges Bank

Tor Oddvar Berge and Casper Christophersen.

We analyse the robustness of the settlement process in the Norges Bank's settlement system (NBO) to operational problems in one of its participating banks. We find that of all banks directly participating in NBO, only four are of systemic importance in the sense that their inability to send payments would have significant effects on other banks. Moreover, the systemic effects can be significantly reduced if banks react quickly by postponing their outgoing payments to the stricken bank.

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Published 22 May 2012 13:00