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Payments Canada designs the next-generation interbank payment system with FNA

Payments Canada is in charge of a multi-year project to modernize Canada’s Payment system and enable real-time payments for the country. Initial estimates predicted a substantial increase in liquidity demands, prompting Payments Canada to consider Liquidity Saving Mechanisms (LSM) for the system. The FNA platform has, therefore, become a pivotal component in determining the most liquidity efficient design of Lynx, the new Canadian Real Time Gross Settlement system.

Payments Canada uses the FNA platform to carry out liquidity simulations, replicating features of the current LVTS design, and also to perform a wide range of network and risk analytics, and visualizations related to Payments Canada’s clearing and settlement systems. The FNA Platform has revealed potential liquidity savings worth $4B USD.

Payments Canada has now a usable working model for their new service. They will validate the design with ongoing simulations throughout 2018 and are planning to expand the FNA Platform to ongoing monitoring and management in 2019.

Background

Payments Canada is in charge of a multi-year project to modernize Canada’s Payment system and enable real-time payments for the country. Initial estimates predicted a substantial increase in liquidity demands, prompting Payments Canada to consider Liquidity Saving Mechanisms (LSM) for the system.

Objective

Simulation of alternative Liquidity Saving Mechanisms to evaluate how much liquidity needs could be reduced without adding undue operational risks.

Outcome

Simulations with FNA Platform reveal potential liquidity savings worth $4B USD. Payments Canada has now a usable working model for their new service. They will validate the design with more simulations in 2018 and are planning to expand the FNA Platform to ongoing monitoring and management in 2019.

 

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