[Economic Term] Large-value funds payment system

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Today's economic term is large-value funds payment system.

It refers to a fund transfer system in which large sums of money are transferred between participating institutions on their own account or on behalf of customers. The large-value funds payment system does not set a minimum amount for payment instructions that are actually settled, but it generally deals with payment due to large-value transactions such as call transactions between financial institutions and securities or foreign exchange transactions in the financial market. The payment amount per transaction is very large. In addition, as it is an important system that settles most of the transaction funds between financial institutions in a country, there is a high need to manage payment timing and reduce payment risk, so most large payment systems in major countries adopt the real-time total payment method that can eliminate credit risk. In many cases, the central bank takes charge of this directly. These include Korea's Bank of Korea Network (BOK-Wire+), the U.S. Federal Reserve's Fedwire, and the European Central Bank's (ECB) TARGET2.

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