4 Factors affecting the liquidity of payment and securities clearing and settlement systems

One of the most important characteristics of the payment systems is the volume of liquidity required for settlement. Smooth execution of transactions is pivotal in maintaining the efficiency of the Hungarian money and capital market

and confidence in its financial infrastructure. A substantial part of settlement of the cash leg of customer and financial transactions takes place in VIBER (also both KELER and GIRO submit their cash-side intraday settlement requests to VIBER). The liquidity of VIBER participants consists of two elements: the current account balance and the intraday credit lines backed by collateral. The liquidity of payment systems was essentially shaped by two factors in 2013: the adjustment to ICS intraday clearing and the Funding for Growth Scheme. As of August 2014, another factor will come into play in shaping the liquidity of payment systems: the elimination of MNB bills and their removal as an instrument of eligible collateral.