In order to enhance central bank understanding of issues relating to securities settlement systems, the Committee on Payment and Settlement Systems reviewed and analysed arrangements in the G-10 countries at a meeting in Basle in December 1990. At that meeting the Committee identified a need for clearer understanding of the concept of delivery versus payment (DVP) and of the implications of the design and operation of systems intended to achieve DVP for credit and liquidity risks in securities settlements. Shortly thereafter, a study group, chaired by Mr. P. Parkinson, was formed to analyse these issues.

This report is the outcome of the study group's efforts. The group has developed a broad framework for analysing the types and sources of risk in securities clearance and settlement, including the concept and implications of DVP. Building on this framework, it has reviewed the design and operation of securities settlement systems in use or under development in the G-10 countries, identified common approaches to DVP and evaluated the implications of the various approaches for central bank policy objectives concerning the stability of financial markets and the containment of systemic risk. By publishing the report the Committee hopes to contribute to the understanding of these issues and thereby to facilitate ongoing efforts to strengthen securities settlement systems in the G-10 countries and in other countries.

This report should be viewed solely as the product of study by the Committee on Payment and Settlement Systems and does not necessarily represent the views of either the central banks of the G-10 countries or the Bank for International Settlements. Able assistance in editing, translating, and publishing the report was provided by the BIS.

Wayne D. Angell, Chairman

Committee on Payment and Settlement Systems and Member of the Board of Governors, Federal Reserve System

September 1992

MEMBERS OF THE DELIVERY VERSUS PAYMENT STUDY GROUP

Chairman	Mr. Patrick Parkinson, Board of Governors of the Federal Reserve System
National Bank of Belgium	Mr. Charles Lots
Bank of England	Mr. David Wyatt
Bank of France	Mr. Joel Merere
Deutsche Bundesbank	Mr. Hans Detmering Mr. Dieter Krebs
Bank of Italy	Mr. Giampietro D'Andria Mr. Pietro Stecconi
Bank of Japan	Mr. Taku Oizumi
Netherlands Bank	Mr. Gert Jan Hogeweg
Sveriges Riksbank	Mr. Hans Backstrom
Swiss National Bank	Mr. Christian Vital Mr. Theodor Scherer
Federal Reserve Bank of New York	Mr. Christopher McCurdy Mrs. MarySue Fisher
Bank for International Settlements	Mr. Paul Van den Bergh
Others who have contributed to the Study Group's report include J. Denissen and T. Dongelmans (Netherlands Bank), T. Noel (Bank of Canada), L. Nystrom (Sveriges Riksbank), L. Sweet (Federal Reserve Bank of New York) and J. Trundle (Bank of England).