The Bank's Oversight of Payments Systems
Payment
Systems
The Bank's Oversight of Payments Systems
Central
Banks and the Oversight of Payment Systems
Risks
in Payment Systems
The Bank's main objective in overseeing payment systems is to ensure that sufficient weight is given to risk reduction and management in their design and operation, while taking into account the potential effect of risk mitigation measures on system efficiency. Robust financial infrastructure plays an important role in containing systemic risk, and payment and settlement systems are at the centre of financial infrastructure.
The Bank's principal focus is on UK payment systems. The intensity of the Bank's oversight is proportionate to its assessment of the systemic risks posed by a system. Because its primary focus is systemic risk, the Bank's oversight focuses most closely on systems which process payments that are individually large and/or where the members do, or can, incur substantial involuntary exposures to one another in carrying out their payment activities. But it is also concerned where problems could have consequences for the wider public, even if the values involved do not give rise to major systemic risks.
The Bank's oversight activities and priorities are set out in an annual Payment Systems Oversight Report. The Report also contains the Bank's assessment of some of the systems it oversees against the Core Principles for Systemically Important Payment Systems published by the committee on Payment and Settlement Systems (CPSS) of the central banks of the Group of Ten countries. The Bank also takes part in a joint Working Group of the European System of Central Banks (ESCB) and the Committee of European Securities Regulators (CESR) on standards for securities settlement systems.
Responsibility for consideration of competition issues in UK payment systems lies with the Office of Fair Trading, the UK's competition authority.
Key Resources
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Payment Systems Oversight Report Download PDF (1mb) |
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Core Principles for Systemically Important Payment Systems Financial Stability Review article, Issue 8, June 2000 Download PDF (112k) |
