Clearing systems based on the netting of balances - such as the SYBIR and ELIXIR systems run by the KIR SA - are characterized by a lag between the reception of payment order and the clearing itself. The system of multi-party clearing of participants´ assets and liabilities operated by the KIR is not secured with any settlement guarantee mechanism. Consequently, if during a given session a paticipant´s funds prove insufficient, the whole process grinds to a complete halt.

Debates on securing the settlement have been in place almost since the House was created. Recent years have seen virtually one systemic change aimed at improving the situation: the banks were allowed to use their required reserves for the purposes of settlement. Since 1994, these reserves have been held on banks´ current accounts, which has greatly reduced the problems - previously very frequent - in concluding the KIR clearing sessions on time.

Debates on securing the settlemen

In September 1999, the NBP significantly lowered the required reserve ratios, and the issue of securing settlements within the KIR systems re-surfaced. The paper presents the author´s views on the mechanisms warranting, or at least facilitating the settlement within the Clearing House.

Debates on securing the settlemen

Having listed the key problems, the author proceeds to recommend steps to be taken by the parties involved. Although both the choice of the parties and the solutions are subject to further debate, the author proposes that, while discussions this important issue (crucial to the operation of the payments system) continue, immediate steps should be taken by participants to implement at least some of the suggested procedures.