Technology Diffusion within Central Banking: The Case of Real-Time Gross Settlement
by Morten L. Bech and Bart Hobijn
Federal Reserve Bank of New York
We examine the diffusion of the real-time gross settlement
(RTGS) technology across the world's 174 central banks.
RTGS reduces settlement risk and facilitates financial innovation
in, for example, the settlement of foreign exchange trades.
In 1985 only three central banks had implemented RTGS systems;
by year-end 2006 that number had increased to ninetythree.
We find that the RTGS diffusion process is consistent
with a standard S-shaped curve. Real GDP per capita, the
relative price of capital, and trade patterns explain a significant
part of the cross-country variation in RTGS adoption.
These determinants are remarkably similar to those that seem
to drive cross-country adoption patterns of other technologies.
JEL Codes: C72, E58.
(PDF, 36 pages 453 kb)