Optimal dynamic clearing for interbank payments

In partnership with the University of Toronto, Payments Canada has released its latest discussion paper, Optimal dynamic clearing for interbank payments. This paper aims to find an optimal clearing policy to minimize the total cost of settlement in relation to the value and time needed to clear settlement obligations. The model can be used by Payments Canada to test the efficiency of current and future liquidity savings mechanisms implemented in Lynx, Canada’s high-value payment system to assess and mitigate potential risks during clearing and settlement processes on an ongoing basis.