BIS report on interdependencies of payment and settlement systems

04 June 2008

Central bankers recommend a number of actions to address the risk-transmission channels brought by system interdependencies. The report draws upon the implications for the safety and efficiency of the global payment and settlement system.

Central bankers recommend a number of actions to address the risk-transmission channels brought by system interdependencies. A report published by the BIS Committee on Payment and Settlement Systems raises concern that the speed and multiplicity of potential disruption channels across the global payment system are not adequately reflected in stress-tests, risk controls, contingency funding plans, and crisis management procedures.

 

The report concludes that interdependencies have important implications for the safety and efficiency of the global payment and settlement infrastructure. Tighter interdependencies have contributed to strengthen the global infrastructure by reducing several sources of settlement costs and risks. At the same time, interdependencies have increased the potential for disruptions to spread quickly and widely across multiple systems. The report suggests that system operators, financial institutions, and service providers take several actions in order to adapt their existing risk management practices.

 

Press release

Report

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