Payment flows of interbank payment and settlement systems in 2002

Payment flows of interbank payment and settlement systems in 2002 1. Development and distribution of interbank turnover among payment systems The value of the interbank payment system in 2002 including the total turnover of VIBER (the Hungarian abbreviation for RealTime Gross Settlement System, RTGS), the account keeping system of the NBH and the Interbank Clearing System (ICS) amounted to HUF 305,788 billion, by 65 percent (HUF 185,331 billion) above the 2001 year value. The expansion of the value of payments shapes an exponentional function, demonstrated by the chart below: HUF bns Value of interbank payment turnover 19952002 350 000 300 000 305 788 250 000 200 000 185 331 150 000 125 419 100 000 50 000 30 338 37 110 55 383 70 626 85 000 1995. 1996. 1997. 1998. 1999. 2000. 2001. 2002. Chart 1 The number of payments transacted amounted to 154.9 million in 2002, 10.7 percent higher than in the previous year (139.9 million). Participants of the payments systems settle the growing proportion of the interbank turnover s value via VIBER operated by the NBH and the central bank s accounting system. In 2002 the share of central bank s systems exceeded 85 percent. The development of proportions over the last few years is shown in the chart below: 1

Distribution of interbank payment turnover between NBH and ICS 100% 90% 80% 70% 51,5 49,3 46,1 47,5 43,8 33,4 23,2 14,7 60% 50% 40% 30% 20% 10% 48,5 50,7 53,9 52,5 56,2 66,6 ICS NBH 76,8 85,3 0% 1995. 1996. 1997. 1998. 1999. 2000. 2001. 2002. Chart 2 The value of the payment turnover increased at the highest rate (+85.3 percent) in VIBER compared to 4.9 percent in ICS. This is in line with the tendencies of the earlier years. The table below indicates the distribution and yearly development of the turnover s value among different systems. 2000. 2001. 2002. Change % HUF billion 2001/2000. 2002/2001. ICS 41 905 42 985 45 074 102,6 104,9 VIBER 83 131 139 757 258 931 168,1 185,3 Central bank accounting system 1 384 2 588 1 782 187,0 68,8 Total 126 419 185 331 305 788 146,6 165,0 Table 1 The distribution on the basis of the number of transactions indicates a completely different situation. The bulk of the payments are settled via ICS, the tendency of changes, however, is parallel to that experienced in the development of transactions value. This tendency is shown in the table below: 2000. 2001. 2002. Change % Number of payments, thousend 2001/2000. 2002/2001. ICS 125 775 139 573 154 482 111,0 110,7 VIBER 159 240 337 151,0 140,7 Central bank accounting system 43 50 58 116,6 116,0 Total 125 977 139 863 154 877 111,0 110,7 Table 2 As a consequence of the abovementioned the average value of transactions in the two systems is developing in the opposite direction; the transaction value in the NBH is growing, whereas in the ICS it is declining, as shown in the chart below: 2

Average value of payments in the ICS(HUF thousand/items) and in the NBH (HUF mns/items) HUF thousand, HUF millions 700 660 600 500 495 514 536 488 491 414 400 300 387 325 450 368 421 362 333 308 292 200 NBH HUF mns/items ICS HUF thousand/items 100 1995. 1996. 1997. 1998. 1999. 2000. 2001. 2002. Chart 3 2. Characteristic data of different payment systems 2.1. Interbank Clearing System The value and number of payment instructions increased moderately in the last three years. The monthly rate of changes is demonstrated in the chart below: Monthly value and volume of payments in ICS in 200020012002 HUF billions Items in thousand 6 000 18 000 5 000 HUF billions Items in thousand 16 000 14 000 4 000 12 000 3 000 10 000 8 000 2 000 6 000 1 000 4 000 2 000 2000 January 2001 January 2002 January Chart 4 3

The bulk of the payments value is simple transfer order; they account for 94.1 percent of the total turnover. As to the number of transactions the share of simple transfer orders is declining compared to the dynamic increase in the number of direct credits and debits. Type of payments Value HUF billions Distribution % Number of payments thousand Distribution % 2000 2001 2002 2002 2000 2001 2002 2002 customerinitiated credit transfer 40 500 41 131 42 425 94,1 85 907 92 522 95 782 62,0 banktobank transfers 48 29 28 0,1 0 0 0 0,0 direct credits 1 104 1 499 2 194 4,9 21 410 26 392 34 536 22,4 direct debits 71 88 107 0,2 17 964 19 960 21 719 14,1 other transactions 163 220 216 0,5 327 548 341 0,2 rejected payments 20 18 20 0,0 166 151 156 0,1 postal cash delivery orders n.a. n.a. 84 0,2 1 949 1,3 Interbank Clearing System 41 905 42 985 45 074 100,0 125 774 139 573 154 482 100,0 Table 3 The rate of concentration in the ICS, i.e. the share of the five largest participants transacting the largest payment turnover in total turnover both in terms of value or volume declined compared to the previous year. Concentration ratio of ICS payments % Volume Value 2000 2001 2002. 2000 2001 2002. 59,26 64,84 61,47 44,10 63,36 56,03 Table 4 Ten participants performing the largest monthly turnover concentrated 81 percent of the value (all of them above HUF 150 billion) and 86 percent of the volume (over 300 thousand transactions per month each) of credit transfers. Three ICS participants sent payments in a number of over 1 million. Similar to earlier years, not only smallvalue orders were processed in the ICS. In 2002, 56 percent of the total value of payments settled were individual orders with over HUF 10 million each, out of which the individual value of 16 percent exceeded HUF 1 billion each. The chart below demonstrates the breakdown in 2002 in value. 4

Distribution of the turnover of ICS payments according to the individual value in 2002 HUF 10005000 millions 11% over 5000 millions 5% HUF 0100 thousands 4% HUF 1001000 thousands 14% HUF 1001000 millions 18% HUF 110 millions 26% HUF 10100 millions 22% HUF 0100 thousands HUF 1001000 thousands HUF 110 millions HUF 10100 millions HUF 1001000 millions HUF 10005000 millions over 5000 millions Chart 5 The number of items of payment instructions in different value ranges in terms of individual value and its changes are indicated in the table below for the period of the last three years. Value ranges Volume of ICS turnover in numbers Dec. 2000 Dec. 2001 Dec. 2002 Changes % 2001/2000 2002/2001 HUF 01 millions 7 555 228 8 069 893 8 519 805 106,8 105,6 HUF 15 millions 333 525 358 982 403 973 107,6 112,5 HUF 510 millions 44 331 48 171 55 031 108,7 114,2 HUF 10100 millions 33 828 36 697 42 014 108,5 114,5 HUF 100500 mns 2 744 2 735 3 084 99,7 112,8 HUF 5001000 mns 334 295 345 88,3 116,9 HUF 10005000 mns 266 201 257 75,6 127,9 over HUF 5000 mns 16 23 23 143,8 100,0 Total 7 970 272 8 516 997 9 024 532 106,9 106,0 Table 5 As it is obvious from the table, the number of largevalue payment orders is increasing almost in all value ranges, whereas the average value of items is declining (Chart 14). The share of orders with an individual value of below HUF 1 million is 94.4 percent in the total number of items (less than in the previous year), the share of the number of items of over HUF 10 million individual value is 0.51 percent (higher than in the previous year). The share of rejected items in ICS is below 0.15 percent, even below 0.1 percent in the second half of the year indicating that banks sent less and less items to each other which the partner bank is unable to credit to its own client s account. In 2003 Giro Ltd. will extend the formal control of orders to the banking sphere of messages too. In the course of the preparatory work participants made tests and those sending incorrect orders were informed on the items, which might have some difficulties in performing. Although the control de facto was not introduced, the effect of the preparatory work is reflected in the declining number of orders rejected. 5

% 0,35 Share of rejected items in the ICS 20002002 0,30 0,25 0,20 0,15 0,10 0,05 0,00 2000 January 2001 January Chart 6 2002 January In 2002 the average daily transaction number in the ICS was 614 thousand (in 2001 556 thousand). On the day with the maximum number of transactions (on 12.03.2002) the number of payment instructions was as high as 1,995 million. The daily turnover value on average in 2002 was HUF 179.6 billion (in 2001 171.3 billion), on the day with the maximum value (on 12.12.2002) HUF 560 billion. Business hours were more respected than in the previous year. In 2001 four banks accomplished sending payment orders later than the closing hour (02:00 a.m.), in 2002 five banks were late in 17 cases (length of the delay varied from 5 minutes to two hours forty minutes). The nighttime processing was performed always on time, opening of VIBER was never delayed due to late forwarding of the settlement positions. In 2002 11 banks in 21 cases did not provide sufficient liquidity for the nighttime settlement of payments, thus a total amount of HUF 14.6 billion was settled in 21 cases out of 251 clearing days during the morning hours processing. While the volume of turnover increased by 4.5 percent, the number of queues grew by 31.2 percent compared to the previous year. This trend is partly explained by the declining share of mandatory reserves, however, as an interesting experience four from among the banks remaining in the queue do never exploit the possibility of setting up limits. 6

2000 2001 2002 HUF millions Queues HUF number millions HUF millions Month number number January 4 886 1 1 169 1 58 3 101 985 3 2 905 3 5 742 1 829 4 79 1 653 2 927 2 1 117 1 3 1 23 1 1 900 1 999 1 2 878 2 53 1 1 368 2 1 443 3 1 638 1 293 3 7 154 1 1 228 2 3 287 2 1 208 1 7 2 581 1 721 2 1 128 3 6 854 1 5 797 Total 15 13 360 16 126 928 21 14 623 Table 6 2.2 Payments settled in the NBH systems The number of payments settled in the NBH systems was 395 thousand in 2002, 36 percent higher than the number in the previous year. The value of the turnover settled was HUF 260.7 trillion, 83 percent higher than in 2001. The table below demonstrates the turnover settled in the NBH broken down by types in the last three years. 2000 2001 2002 Value Volume Average Value Volume Average Value Volume Average HUF bns Thousends HUF mns HUF bns Thousends HUF mns HUF bns Thousends HUF mns VIBER (RTGS) payments 0 0,0 0,0 139 757 239,8 582,7 258 931 337,3 767,6 banktobank transfers 84 0,2 0,4 90 357 121,4 744,5 209 431 190,3 1 100,3 DVP transactions 19 896 59,1 336,4 23 883 79,3 301,2 customer transfers 13 700 35,2 388,7 9 943 45,1 220,5 NBH and other transactions 15 805 24,1 656,0 15 674 22,6 692,9 NBH accounting system 0,1 2 588 50,0 51,8 1 782 58,0 30,7 FX transactions 0,1 1 975 37,7 52,3 462 48,4 9,5 deposits with the central bank 235 0,7 321,7 553 1,2 477,0 other transactions 379 11,5 32,9 766 8,4 91,4 Total transactions with NBH 142 346 289,8 491,2 260 713 395,3 659,5 Table 7 2.2.1. VIBER The number of VIBER participants was 38 in 2002, one less than in the previous year since the participantship of Otthon Lakástakarékpénztár has ceased. Value and volume of transactions in VIBER increased dynamically. The value of transactions amounted to HUF 258.9 trillion, 85.3 percent higher than in the previous year, whereas the number of transactions, 337.3 thousand, was 40.7 percent more than the volume in 2001. The chart below indicates the monthly development of the value and quantity of transactions as of 2000. 7

Value and number of transactions settled in VIBER Value HUF bns Number 35 000 40 000 30 000 35 000 25 000 Turnover HUF bns Number 30 000 20 000 15 000 10 000 5 000 2000 January 2001 January Chart 7 2002 January The development of the turnover in VIBER compared to domestic payment transactions settled in the EU member countries was the following: 25 000 20 000 15 000 10 000 5 000 Thousand Number of transactions in the RTGS systems in 2002 (domestic) 30 000 27 596 25 000 20 000 15 000 10 000 8 038 5 000 4 002 2 644 2 145 2 164 1 228 901 858 651 337 314 143 82 10 4 Germany Italy Netherland Spain France Austria U.K. Greece Belgium Portugal Hungary Ireland Finnland Luxembourg Denmark Sweden Chart 8 8

EUR bns 100 000 90 000 91 818 Value of transactions in the RTGS systems in 2002 (domestic) 80 000 70 000 73 299 60 000 58 898 50 000 40 000 30 000 20 000 16 356 10 000 9 600 6 598 3 844 3 088 2 342 2 003 1 425 1 274 1 230 1 056 82 56 Germany France Spain Italy Netherland U.K. Belgium Ireland Ausztria Finnland Greece Portugal Luxemburg Hungary Sweden Denmark Chart 9 The average value of transactions in VIBER is increasing, especially among banktobank transactions, which is partly due to the fact that the banks foreign correspondents are behind these transactions. At the same time, the average value of ICS transactions is declining. The average value of transactions in the two systems is shown in the chart below. HUF thousand, HUF mns 900 Average value of transactions in ICS (HUF thousand/transaction) and in the VIBER (HUF mns/transaction) 800 768 700 600 500 495 514 536 504 517 583 400 300 450 VIBER HUF mns/transaction ICS HUF thousand/ transaction 362 333 308 292 200 100 1995. 1996. 1997. 1998. 1999. 2000. 2001. 2002. Chart 10 9

Rank of EU countries by average value of transactions is shown in the chart below. EUR mns 40 Average value of transactions in the RTGS systems in 2002 (domestic transactions) 35 33,9 30 25 22,3 20 15 15,0 14,0 10 9,8 9,4 5 5,4 5,4 4,5 3,3 3,1 2,4 2,0 2,0 1,6 1,1 France Spain Luxemburg Finnland Ireland Sweden Denmark U.K. Belgium Germany Hungary Netherland Italy Portugal Greece Austria Chart 11 The average daily number of transactions in VIBER was 1 344 in 2002, compared to 955 in 2001, 1.4 times higher than in the previous year. The average daily turnover was HUF 1031.6 billion in 2002, 556.8 billion in 2001, a 1.85fold increase. The highest daily number of transactions in 2002 in VIBER was 2 414 on 21, the highest daily value was HUF 2 241 trillion on 25. The maximum number and value days per month are shown in the two charts below: HUF bns Maximum value of daily transactions in VIBER in 2002 2500 2241,4 2197,5 2000 1500 1599 1597 1465 1254 1395 1264 1391,5 1320,6 1234,1 1601,5 1000 500 0 01.30. 02.20. 03.27. 04.17. 05.14. 06.12. 07.10. 08.14. 09.18. 10.24. 11.25. 12.27. Chart 12 10

Maximum number of daily transactions in VIBER in 2002 number 3000 2500 2399 2414 2000 1800 2107 1804 1711 1686 2000 1787 2144 1500 1487 1499 1000 500 0 01.31 02.28. 03.20. 04.17. 05.2. 06.12. 07.10. 08.2. 09.18. 10.24. 11.21 12.27. Chart 13 In the VIBER the turnover connected with interbank transactions is dominating both in volume and value. The growth both in the number (29.6 percent) and the value (77.2 percent) of transactions is significant compared to the previous year. Also the number of customer transfers increased dramatically (39.5 percent), the value of turnover calculated, however, has seemingly declined (by 22.6 percent), since in 2001 part of the interbank turnover, namely some payment instructions of foreign banks were categorised among these type of transactions. In the case of securities transactions a considerable growth was registered both in the value (80.6 percent) and number (42.3 percent) of transactions. The two charts below demonstrate the breakdown of payment instructions settled in the VIBER by types of transactions. 11

HUF bns Breakdown of the value of payments in the VIBER by types of transactions 25 000 20 000 15 000 2000. december 2001.december 2002. december 10 000 5 000 Banktobank items Customer payments Cash payments NBH transfers Securities DVP Chart 14 number Breakdown of the number of payments in the VIBER by types of transactions 18 000 16 000 14 000 12 000 2000. december 2001.december 2002. december 10 000 8 000 6 000 4 000 2 000 Banktobank items Customer payments Cash payments NBH transfers Securities DVP Chart 15 The average value of transactions increased by 28.1 percent in 2002 compared to 2001, within that among NBH items at the highest rate, first of all among deposits with the central bank (90.3 percent) and among interbank transactions (36.6 percent). The average value of transactions is indicated in the table below by types of transactions. 12

Banktobank items Average value of transaction HUF mns Cash NBH payments transfers Customer payments Securities DVP Total 2000. december 531,0 199,1 202,6 2 798,2 262,4 431,3 2001.december 899,5 286,3 210,3 2 129,7 295,5 652,1 2002. december 1 228,4 158,9 146,3 4 053,4 375,1 835,3 Table 8 Investigating value ranges used in the course of data collection it can be stated that the number of relatively small value individual payments (under HUF 10 million) increased from 26 to 27 percent, that of large value transactions (over HUF 1 billion) from 15 to 18 percent, whereas the share of other categories has declined. The breakdown according to individual values compared to the previous year is demonstrated in the chart below: Breakdown of the number of VIBER transactions according to individual value of transactions in 2001 (inner circle) and in 2002 above 5000 mns 3% HUF 10005000 mns 15% HUF 010 mns 27% HUF 10005000 mns 13% above 5000 mns 2% HUF 010 mns 26% HUF 10100 mns HUF 1001000 mns 20% 39% HUF 010 mns HUF 10100 mns HUF 1001000 mns HUF 10005000 mns above 5000 mns HUF 1001000 mns 36% HUF 10100 mns 19% Chart 16 In 2002 45.1 thousand customer transfers were concluded in VIBER in a value of HUF 9.9 trillion; the number of transactions increased by 28 percent, the value decreased by 27 percent. The reason of that is enlightened in the explanations of the charts 14 and 15. 13

Value HUF bns 6 000 Number and value of customer transfers in VIBER between 2000 and 2002 volume 4000 5 000 4 000 Number Value HUF bns 3500 3000 2500 3 000 2 000 1 000 2000 January 2001 January Chart 17 2002 January Customers of banks may indicate in their transfer orders if the order should be settled via ICS or VIBER. In 2002 95.8 million customer transfers were settled in the two payment systems together, of which only 0.05 percent, 45 thousand was settled in VIBER compared to 35 thousand, 0.04 percent in 2001. The value of customer transfers settled in the VIBERsystem amounted to HUF 9.9 trillion, 19 percent of the total value of (ICS+VIBER) customer transfers. Out of the ICS customer transfers with over HUF 10 million individual value and VIBER transfers (independent from the value) 31 percent on average was settled in the VIBER. The change in the proportion between the two systems is demonstrated in the chart below. 2000 1500 1000 500 0 14

The proportion of customer transfers settled in the ICS (over HUF 10 million individual value) and VIBER customer transfers 100% 80% 60% 40% 20% 0% 2000 January VIBER customer transfers ICS customer transfer (over HUF 10 million individual value) 2001 January Chart 18 2002 January The distribution of payment settlements during the day has changed compared to the previous year; the proportion of the settlements in the later hours of the business day is higher. Data of two days in indicate that in 2002 67.5 percent of the number and 64.3 percent of the value of transfers was settled until 1:00 p.m., whereas in 2001 the proportion of the numbers was 82.9 percent, of the value 88.2 percent until that date. This tendency is indicated in the chart below. % 120,0 Cummulative intraday pattern of VIBER 20012002. 100,0 80,0 60,0 40,0 20,0 9 10 11 12 13 14 15 16 17 transaction number 2002 23,6 31,8 41,3 58,8 67,5 80,9 92,3 99,0 100,0 value of transactions 2002 25,0 30,8 36,0 55,9 64,3 72,7 87,2 98,7 100,0 transaction number 2001 24,4 37,2 49,1 67,0 82,9 88,7 94,3 98,7 100,0 value of transactions 2001 47,0 57,9 63,3 75,0 88,2 92,4 97,1 98,4 100,0 Chart 19 15

In the case of payment orders sent in to VIBER the value and occurrence of queuing 1 is growing year by year. In 2002 the yearly amount of orders opening the queues was HUF 32.3 trillion, 2.7fold of the 2001 year amount. (Besides the liquidity position of the system this data indicates the increase in the average value of orders too.) Orders sent into the VIBER were settled in each case until the end of the day; the system didn t cancel any item in the queue due to the lack of funds. HUF billion Amount of queuing per month 200020012002 5 000 4 624 4 500 4 000 3 500 3 000 2 500 2 000 1 500 1 837 2000. 2001. 2002. 1 681 1 976 2 522 2 456 1 876 2 092 2 681 1 217 2 489 2 963 1 570 1 619 3 903 1 891 1 214 3 043 1 339 1 000 500 403 386 159 150 173 98 156 150 120 95 89 115 January Chart 20 23 71 96 123 117 1 The summary includes transactions of which the system sent the message the transaction is queuing due to the lack of coverage. (The system instructs the account owner VIBER member on the queue generated due to insufficient coverage, more precisely, if the instruction on the top of the queue doesn t move until 90 seconds. Next time a message is sent if the item on the top of the queue is changing it will be settled or will be subordinated in the priority line and there are more queuing items not performing within 90 seconds, i.e. there might be more items in the queue but there is no information on them). The de facto queuing might have been even higher. 16

number of queues Number of queues in VIBER 20002002 350 300 250 200 150 100 50 234 206 180 126 76 68 148 140 2000. 2001. 2002. 212 213 166 106 76 157 193 114 201 155 82 251 219 32 280 194 53 235 294 259 219 45 310 268 224 222 59 64 January Chart 21 The availability of VIBER (i.e. the presence of the contact of the central element and of the SWIFT) indicates an improving tendency; the average yearly indicator was 99.03 percent in 2000, 99.59 in 2001 and 99.8 in 2002. (In 2002 the length of stoppages varied from 18 to 66 minutes). The availability of the system is shown in the chart below. VIBER availability 101,00% 100,00% 99,00% 98,00% 97,00% 100,00% 100,00% 100,00% 100,00% 100,00% 100,00% 100,00% 99,64% 99,88% 99,52% 100,00% 99,91% 100,00% 100,00% 100,00% 99,99% 100,00% 99,51% 99,24% 100,00% 100,00% 99,94% 100,00% 99,92% 100,00% 98,87% 99,21% 99,60% 99,62% 98,54% 98,89% 98,90% 98,98% 97,97% 97,52% 96,00% 95,00% 95,45% 94,00% 93,00% 2000 January 2001 January 2002 January Chart 22 2.2.2. The customer account keeping system of NBH The home accounting system of NBH performs the settlement of Forint transactions for VIBER participants before the opening and after the closing time of VIBER and during operating hours for nonviber participants. The value of that in 2002 was HUF 1.8 trillion, 17

the number of transactions 58 thousand. The turnover compared to 2001 declined to 68.8 percent (2001: HUF 2.6 trillion). The reason for that is the fact that in mid2001 following the liberalization of FX transactions and the change in the exchange rate system the value of FX transactions suddenly and temporarily increased. The number of transactions increased by 15.9 percent. (In order to avoid double counting these data do not contain the matrix sum of interbank positions produced as the result of overnight ICS processes.) The distribution of that is shown in the chart below. The value of the turnover of the NBH customer account keeping system 2002 FX transactions concluded with NBH 26% other transactions 43% FX transactions concluded with NBH central bank deposit other transactions central bank deposit 31% Chart 23 2.3. Securities settlements The settlement of the equity, government security and futures trading of the Budapest Stock Exchange, the futures trading of the Budapest Commodity Exchange and the OTC government paper market transactions is concluded by KELER Rt. The total value of the three markets in 2002 was HUF 28.9 trillion, by 16.8 percent (HUF 24.7 trillion) higher than in the previous year. In 2002 the drop in the turnover of the Budapest Stock Exchange experienced in 2001 ceased (the turnover in 2001 plummeted to 39.9 percent of the previous year s value), and trading rose by 13.3 percent. OTC turnover is continuously increasing, although at a declining rate (33.4 percent and 17.8 percent, respectively). Futures trading indicates a 10.4 percent increase following a 26.3 percent decline in the previous year. These tendencies are shown in the chart below. 18

25 000 HUF bns Securities settlement turnover concluded by KELER Ltd. 20002002 23 477 20 000 BSE trading OTC and other gross settlements Futures trading 19 924 15 000 14 926 10 000 8 155 5 000 2 071 3 254 3 688 1 527 1 686 2000 2001 2002 Chart 24 3. Management of liquidity in the different payment systems The source of liquidity in the payment systems is composed of the account balance with the central bank and intraday credit limit against collateral. The proportion of daily liquidity over payment turnover has drastically changed in the last three years. The level of mandatory reserves declined, credit limits increased, as of mid2001, however, the combined growth in the two liquidity components lagged considerably behind the daily average increase in payment turnover. This development is demonstrated in the chart below. 19

Comparison of the daily average liquidity (bank account+overdraft) and payment turnover of banks HUF bns 1 800 1 600 1 400 1 200 1 000 daily turnover account balance overdraft 800 600 400 200 2000 January 2001 January 2002 January Chart 25 The average value of the daily initial intraday credit limit of banks was HUF 200.7 billion in 2002, compared to the daily HUF 85.5 billion on average in 2001. The amount of the limit is drastically fluctuating during the year and is increasing in the last months of the year. The fluctuation during the year is more robust than experienced in the previous years. The development of the daily initial credit limit is shown in the chart below. 300 HUF bns Limits generated by banks (overdrafts) 250 200 215,4 214,3 211,6 219,3 181,4 183,5 241,8 206,6 150 100 50 96,7 91,0 81,1 72,5 78,4 61,2 92,0 93,0 55,8 56,2 85,5 45,8 44,5 45,9 44,7 45,1 78,5 72,0 47,6 45,1 43,2 45,4 41,4 43,9 44,7 45,1 43,6 1999. szeptember október november december 2000 January 2001 January 129,5 2002 January 184,5 184,1 180,5 184,9 Chart 26 The daily payment turnover amounted to the double of the value of the daily average cover in 2002, whereas in 2001 this value was the 1.49fold. (The value of the indicator equals one if 20

the value of daily debits is equal to the liquidity available.) Monthly fluctuation of coverage is demonstrated in the chart below (excluding Hungarian Treasury, Hungarian Post and NBH). Proportion of daily debit over coverage of banks (total debits over coverage) as of January 2001 3,50 3,00 2,89 2,50 2,00 1,50 1,00 0,50 0,72 0,98 0,97 0,92 1,18 1,61 1,73 1,65 1,63 1,01 1,74 1,80 1,89 1,58 1,66 1,89 1,65 1,77 1,97 1,68 2,12 2,39 2,45 2001 January 2002 January Chart 27 Should a bank not repay the intraday credit line drawn during the day on account of the limit by the end of the day, the central bank will extend an automatic overnight credit collateralised with securities. The annual turnover of the end of the day credit disbursement in 2002 was HUF 597.8 billion, compared to HUF 202.2 billion in 2001, a 2.95times increase. Monthly fluctuation of the end of the day credit extended is demonstrated in the chart below. HUF mns Overnight endoftheday credit drawn by banks 180 000 165 250 160 000 140 000 120 000 100 000 124 105 142 455 107 412 92 019 80 000 60 000 63 340 40 000 20 000 11 066 825 2 545 287 38 918 11 580 310 17 7 584 1 963 30 262 2001 January 2002 January Chart 28 21