Managing Payment System Risk During the Transition From a Centrally Planned to a Market Economy


Andrew T. Hook

Publication Date:

November 1, 1992

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate


The objectives and functions of payments systems in centrally planned economies are described and analyzed. These are compared to those of payments systems in market economies and to the characteristics of an ideal payments system. The dominant role of the state in the centrally planned economies meant that the state underwrote virtually all payments risk. With the withdrawal of the state, however, participants became exposed to credit, liquidity, and operational risks. In the transition, the central bank has a key role to play in payments systems. Areas where rapid improvements are possible are: accounting, clearing, settlement, netting and standardization.


Working Paper No. 1992/095



Publication Date:

November 1, 1992



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