Liquidity stress test shows that Kronos is resilient

Analysis - May 2019 - no. 9

Authors Nilsson, Thomas Christian
Subject Payment and settlement systems; Kronos; Oversight
Type Analysis
Year 2019
Published 9 May 2019
Kronos is Danmarks Nationalbank's payment system for large-value time-critical payments and it is the heart of the Danish financial infrastructure. The analysis assesses the robustness of the system, measured as the change in participants' liquidity needs as well as their ability to settle payments in a timely manner when the system is exposed to stress in three different scenarios: (1) One large participant cannot submit payments for a full business day, (2) the money market is inaccessible, and (3) the participants' access to intraday credit is reduced. The analysis shows that the system is resilient in all three scenarios.