Network Analysis and Canada’s Large Value Transfer System

A recent paper by Lana Embree and Tom Roberts looks at the daily and intraday network structure of payment activity in the Canadian Large Value Transfer System (LVTS). The paper provides a good overview of the concepts and a nice comparison of emprical research in several payment networks. For LVTS they find that it is highly centralized among a few key participants similar to other interbank payment systems. They conclude that this could heighten the systemic importance of these participants, and the susceptibility of the system to financial contagion.