CHIPS remains top of market, TCH report states
01 February 2023 US
Image: Cozine/stock.adobe.com
The Clearing House (TCH) has released the findings of an independent review into the efficacy of clearing and settlement system CHIPS, conducted by technology firm FNA.
The report concludes that CHIPS is “extremely efficient” in its use of liquidity and compares “very favourably” against similar global high-value payment systems. This efficiency allows for liquidity to be used elsewhere, something essential in light of rising rates, TCH says.
CHIPS currently has a daily liquidity efficiency average of 29:1, and is able to settle payment in near real-time. An average of US $1.9 trillion is settled each day, with payments continually matched and offset.
Richard Dzina, senior vice president of product development at TCH, says: “The liquidity efficiency of CHIPS has been well documented in academic literature. FNA’s analysis adds to this by uniquely using CHIPS payments data relative to other real and hypothetical systems. The results of the analysis underscore not only the economic cost savings but also the financial stability benefits that derive from the efficient use of liquidity.”
Kimmo Soramäki, founder and CEO of FNA, comments: “FNA’s network analytics and simulation technology provides visibility and foresight over the flow of payments, highlighting previously unseen opportunities for greater operational efficiency and resiliency. Not only has this validated CHIPS’ liquidity efficiency, but also provided TCH with opportunities to improve CHIPS further.”
The report concludes that CHIPS is “extremely efficient” in its use of liquidity and compares “very favourably” against similar global high-value payment systems. This efficiency allows for liquidity to be used elsewhere, something essential in light of rising rates, TCH says.
CHIPS currently has a daily liquidity efficiency average of 29:1, and is able to settle payment in near real-time. An average of US $1.9 trillion is settled each day, with payments continually matched and offset.
Richard Dzina, senior vice president of product development at TCH, says: “The liquidity efficiency of CHIPS has been well documented in academic literature. FNA’s analysis adds to this by uniquely using CHIPS payments data relative to other real and hypothetical systems. The results of the analysis underscore not only the economic cost savings but also the financial stability benefits that derive from the efficient use of liquidity.”
Kimmo Soramäki, founder and CEO of FNA, comments: “FNA’s network analytics and simulation technology provides visibility and foresight over the flow of payments, highlighting previously unseen opportunities for greater operational efficiency and resiliency. Not only has this validated CHIPS’ liquidity efficiency, but also provided TCH with opportunities to improve CHIPS further.”
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