News 

10th Economics of Payment conference 2020 (EOP X) will be held in Helsinki back to back with our Simulator Seminar

EOP X will take place on 2–3 September 2020 and will be followed by the simulator seminar on 4 September. The call for papers for the simulator seminar will be issued in January 2020.

The simulator general training will be held on 31 August–1 September, before the seminar days. Take note that the training will be based on the fully renewed simulator PSS3!

The Last version 10 of the BoF-PSS2 Simulator family has been released in December 2019 – The first version of BoF-PSS3 will be released later 2020

The version 10 mainly contains some ABM related improvements and some minor bugs and usability fixes.

BoF-PSS2

The Bank of Finland provides a multipurpose simulator, called BoF-PSS2 for replicating payment and securities settlement systems. The simulator is adaptable for modelling multisystem setups that can be combinations of payment, securities settlement systems and cash CCPs. The simulator supports agent based modelling (ABM) which allows to extend simulations to incorporate behavioral rules for participants’ active decision making and more realistic modelling.

The simulator is known to be unique and the first of its kind. Since its launch in 2002 the simulator has been distributed to many countries and it has contributed to numerous studies and research papers. The simulator can be used to fulfil some of the regulatory requirements stated in the PFMI and BCBS requirements, such as identifying liquidity and credit risks in FMIs (Financial Market Infrastructures).

The simulator can be used for:

  • Agent based modelling (ABM)
  • Analysis of settlement, liquidity and credit risks in FMIs
  • Analysis of systemic risks and counterparty risks in FMIs
  • Analysis of system and participant mergers
  • CCP & CSD settlement simulations
  • Evaluation of sufficiency of liquidity buffers and margins
  • Identification of critical counterparts
  • Liquidity analysis
  • Multiple system and currency simulations
  • Netting algorithm testing and development
  • Network analysis
  • Payment and securities settlement simulations
  • Rule change evaluations
  • Stress testing
  • System development and prototyping
  • System performance benchmarking

Currently, the simulator team is renewing the GUI for better user experience.

In contrast to static calculations of indicators, the simulation results naturally incorporate network (or systemic) effects arising from the payment flows and the technical properties of the infrastructures themselves. The results obtained from simulations are directly interpretable and have a self-evident meaning which is not always the case with all indicators. The results can be used directly for risk management purposes, for example when evaluating the sufficiency of liquidity buffers and margins. Computer simulations take advantage of using the available information in full without losing micro-level information due to indicator aggregations.

The simulator is freely available for research purposes and has already been introduced in numerous countries. It is possible to tailor and adapt the simulator to specific payment or securities settlement systems. Several adaptations have already been made, like for TARGET2.

The simulator team provides training, consultation and tailored adaptations which are priced for cost recovery. The training course aims at providing the necessary skills for efficient use of BoF-PSS2 with hands-on computer class exercises. It also presents numerous examples from real studies where the tool has been used. For more details see the training course outline. Minimum attendance for the session is four participants. Training is organized on demand, and it is also possible to order a training course to be held onsite outside the proposed dates.