Payment Networks: A Review of Recent Research

In this article, the authors review work done at the Bank of Canada and at other central banks with the relatively new application of network analysis to the study of payments systems. This approach allows researchers to study these systems as a whole, rather than at the participant level. Recent work on Canada’s Large Value Transfer System has revealed two communities of participants within the system. This work provides system overseers and financial-stability policy-makers with a new means of evaluating the systemic importance of individual participants and the connections between them.