One of the big issues in 2008 was that payments took multiple days to clear. That meant all the banks owed each other big chunks of money. That's not really a problem: if Bank A owes Bank B 1Bn and Bank B owes bank A 1.01 Bn, they're both solvent and you can just net them off to tell what your profit is.
But if Bank A suddenly goes Bankrupt, Bank B might still owe Banks A's creditors but won't get paid. So Bank B is fucked now too, even though they weren't doing anything dumb. In turn other banks will be pulled down when Bank B fails. This is why Lehmans was bailed out (in theory, conspiracies aside)
This is called Contagion, it's a type of counterparty risk:
the risk that you make good deals and everything works out in your favour but the people who are meant to pay you welch.
To reduce this, there has been a big push to cut the time between trades\deals and settlement of payments. Ideally we want it to be immediate.
This is one reason central banks might be pushing this.
But if Bank A suddenly goes Bankrupt, Bank B might still owe Banks A's creditors but won't get paid. So Bank B is fucked now too, even though they weren't doing anything dumb. In turn other banks will be pulled down when Bank B fails. This is why Lehmans was bailed out (in theory, conspiracies aside)
This is called Contagion, it's a type of counterparty risk: the risk that you make good deals and everything works out in your favour but the people who are meant to pay you welch.
To reduce this, there has been a big push to cut the time between trades\deals and settlement of payments. Ideally we want it to be immediate.
This is one reason central banks might be pushing this.