Another euro-related operational issue has cropped up. Banks have tended not to charge each other for the provision of intra-day liquidity, but the euro payment systems will change all that - at least that's what bankers are predicting.
But there's a problem. Hanging onto cash till the last minute before real-time gross settlement systems close for the day may be tempting, but if everyone does it the result will be systems overload and chaos.
The informal Heathrow Group of around 40 major banks, expected to account for around 85% of euro payments, has devised conventions to encourage responsible behaviour and smooth batching of payments, for the common good. But how far can these institutions rely on enlightened self-interest to triumph over greed? Ultimately, some banks will start to take advantage of other banks' greater altruism, sparking the breakdown of the entire system.
The medium-term answer is to charge banks for liquidity. Intra-day interest rates will probably not be workable any time soon, say most market participants, because calculating rates and applying them would itself cause more systems overload. More likely, they will be charged a standard fee based on the volume of liquidity provided.