Payment System Liquidity Index

Abstract

ISSP is an index that demonstrates payment system’s stability figuring its liquidity (ISLSP) and its operational capability (IOSP). It was formed using two methods, which are statistical normalization and conversion using empirical normalization Min-Max. Basically, this paper intends to evaluate towards variables used in forming ISLSP and basically as a tool to ensure data sensitivity to important events stated. To get ISLSP that is sensitive to RTGS liquidity condition, we use coefficient from each weighted variable through simultaneous regression. We get parameters simbolized , and that are used as weight for each variable. Based on observation to these weighted variables, liquidity variables contribute 60%, PUAB contribute 30%, and interconnectedness contribute 10% in forming ISLSP.