Stefan W. Schmitz & Geoffrey Wood 
Institutional Change in the Payments System and Monetary Policy 

’Central bankers worldwide welcome the recent increase of research on payment systems. This volume, providing an expert overview on this timely subject, should be required reading for us all’. – Erkki Liikanen, Governor of the Bank of Finland

Monetary policy has been at the centre of economic research from the early stages of economic thought, but payment system research has attracted increased academic attention only in the past decade. This book’s succeeds in merging these two so far largely separated fields.

Innovative and groundbreaking, Schmitz and Woods initiate research on the interdependence of institutional change in the payments system and monetary policy, examining the different channels via which payment systems affect monetary policy. It explores important themes such as:

• conceptualization and methods of analysis of institutional change in the payments system


• determinants of institutional change in the payments system – political-economy versus technology


• empirics of institutional change in the retail and in the wholesale payments systems – policy initiatives and new technologies in the payments system


• implications of institutional change in the payments system for monetary policy and the instruments available to central banks to cope with it.

The result is an accessible overview of conceptual and methodological approaches to institutional change in payment systems, and a comprehensive and yet thorough assessment of its implications for monetary policy. The insights this timely book provides will be invaluable for researchers and practitioners in the field of monetary economics.