[gendal]

Hi there,

Richard Brown here - the author of the linked article.

Very good point re FX and CLS. I wanted to make the article as simple as possible so as to bring out the fundamental concepts (correspondent banking, deferred net settlement, real-time gross settlement, etc).

In so doing, I had to make some gross simplifications and omissions - the most obvious being ignoring FX but I also made a sleight of hand by implying that banks within a country use the correspondent arrangement I outlined.

However, I hope - even with these simplifications - the concepts came across clearly.

Thanks for taking the time to comment.

Richard

[DEinspanjer]

Richard, thanks again for the article. I posted a comment there regarding a recent goof up between two banks that resulted in "free money" for me. I'd love to get some insight into what might have really happened, and what, if anything, I might be able to do about it. Please feel free to reply here, there, or directly if you are interested.

[scoot]

* However, I hope - even with these simplifications - the concepts came across clearly. *

They did, and thank you for that. Still, I would love to see a follow-up article that 'unsimplifies' things a bit, as well as covering FX.

[gendal]

Hi there,

Probably the best in-depth book on this topic I've read is this one. I'd highly recommend it. http://www.amazon.co.uk/Payment-Systems-Macmillan-Financial-...

(Disclosure: it was co-written by one of my colleagues at IBM)

[jackgavigan]

I am instinctively against over-simplification of this sort of thing because, in my experience, the devil is in the detail and a little knowledge is a dangerous thing.

[gendal]

Well, I certainly hope nobody tries to build a system off the back of that blogpost!

But I think there is a lot to be said for helping people build useful mental models. My experience is that people either have no mental model for how money moves or have models that are just wrong.

So anything we can do to impart some insight has to be a good thing.... but you're right: a little knowledge can be very dangerous :-)

[scott_s]

"Education is a series of small lies." - my intro to computer engineering professor upon telling us that some gates are ternary

I don't see any other way to teach ideas than to start simple, help provide intuition for the basic concepts, and build from there.

[Pitarou]

We are all against OVER-simplification. I think what you meant to say was: "This article wasn't in-depth enough for me."

Maybe you should ask the author to add some further-reading references to the article?