Liquidity management IN MIPS
MIPS provides a variety of options that enable efficient liquidity management.
First, banks participating in MIPS have access to various liquidity sources, such as reserve requirement, intraday credit and overnight credit facilities. Banks fulfill the reserve requirement on an average basis on accounts with the National Bank in MIPS. Reserve requirement can be fully used on a daily basis for settling payment transactions in MIPS. If the reserve requirement is not sufficient to settle payment transactions, the bank can borrow collateralized interest-free intraday credit from the National Bank, which can be turned into overnight credit.
Second, the following features of the MIPS facilitate liquidity management:
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option to check the participants' account balances in real time,
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information on expected queuing outflows and inflows,
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the participant can change the priority of payment messages or revoke individual payments if payments messages are in a queue.
Third, the following features are aimed at reducing the liquidity requirements of the whole system:
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in case of queued payments in the system, MIPS, according to the Operating Rules of MIPS, can activate the procedure for settlement of queued payments,
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MIPS participant pays a fee that depends on the time of the settlement during the day. Transaction price increases over time, whereby for the subsequent payments during the day the price is higher. This is an incentive for participants to settle their transactions earlier. The aim is to protect participants against any delay of their payments, waiting for inflows to fund their outflows.