A primary systemic risk within an RTGS network is Liquidity Gridlock—a failure mode where multiple participant banks hold back outgoing payments while waiting to receive incoming transfers, causing processing speeds to collapse.
The Gridlock Contagion Sequence
[Bank Alpha Conserves Reserves] 
           |
           v
[Holds Back Outgoing Payments] ------------> Drains expected inflows for Bank Beta
           |
           v
[Bank Beta Freezes Processing Queues] -----> Forces wider payment conservation measures
           |
           v
[System-Wide Liquidity Gridlock] ----------> Realizes systemic processing collapse

If a single large participant bank holds back its morning payments to conserve capital, it can trigger a domino effect that starves counterparty banks of expected inflows. This cascade forces the entire system into a gridlock that can disrupt financial markets and require central bank intervention.
 
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