Abstract: Advances in telecommunication networks, and, in particular, the Internet have transformed the economic landscape for financial decision-making. In this paper, we focus on financial networks with electronic transactions and with different tiers of decision-makers and we develop an integrated framework for the modeling, analysis, and computation of solutions to such problems. Specifically, we consider an economy consisting of three types of decisionmakers: those with sources of funds; intermediary ones, and consumers associated with the financial products at the demand markets. Those with sources of funds can transact with the intermediaries either physically or electronically as well as directly in an electronic manner with the consumers. The intermediaries, in turn, can also transact with the consumers either in a physical or an electronic fashion. We address the behavior of the decision-makers, identify the network structure of the problem, derive the equilibrium conditions, and establish the variational inequality formulation. In addition, we propose a continuous time adjustment process for the study of the disequilibrium dynamics and prove that the set of stationary points of the resulting projected dynamical system coincides with the set of solutions of the variational inequality. We then utilize variational inequality theory to derive qualitative properties of the equilibrium price and financial flow pattern. Finally, we apply an algorithm for the determination of equilibrium prices and financial flows in several examples. 1

payments have reached as high as Baht 250 billion, accounting for 5 percent of Gross Domestic Product. Thus, apart from their macro objective of price stability, central banks have increased their interest in maintaining financial stability as a micro objective, particularly in the core areas of the payment system. This paper aims to increase the understanding of this role in three ways. First, a conceptual framework is developed to group payment schemes into three levels and major payment systems are identified. Second, the central bank’s oversight of payment systems and their compliance with the BIS Core Principles are reviewed. And third, future challenges, particularly on the regulatory, technological and international fronts, are discussed. 1.

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Temi di discussione

“NEW TECHNOLOGIES FOR SMALL AND MEDIUM-SIZE ENTERPRISE FINANCE”

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