Economic Quarterly

Spring 1997

The Organization of Private Payment Networks

John A. Weinberg

A significant part of payment system activity is and historically has been conducted through private, multilateral arrangements among banks. Such arrangements arise in response to the network characteristics of payment systems. Network characteristics, some observers believe, are a source of market failure that prevents private initiatives from achieving economic efficiency. This conclusion derives from a theoretical approach that takes the organization of private arrangements as given. A theory that instead seeks to explain how private arrangements emerge in network markets has very different implications.

Our Research Focus: Payments and Policy

Contact Us

Lisa Kenney
(804) 697-8179

Publications image
Get Our Free Publications

To receive a notification by email when Economic Quarterly is posted online or to order single copies of past issues, click on the links below (published online only since 2012).