Page 40 - ITU-T Focus Group Digital Financial Services – Interoperability

ITU-T Focus Group Digital Financial Services
Interoperability

the development of technical infrastructures and institutional arrangements to meet the economy’s growing
payment needs.

Oversight scope and powers

13. Oversight is mainly intended to cover payment infrastructures that are systemically important. These
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include infrastructures whose failure can potentially endanger the operation of the whole economy. The
scope of oversight therefore covers large-value payment systems. In an increasing number of jurisdictions,
however, the oversight scope has been expanded to also cover those retail payment systems that, while not
being systemically important, are nonetheless deemed to be relevant for the purpose of protecting public
confidence in the currency and the monetary system of the country. To this purpose, effective oversight,
today, increasingly requires central banks to extend their control to payment instruments and schemes and
to individual PSPs (including banks, nonbanks, and nonfinancial institutions).

14. Effective oversight requires central banks to have the power and resources to effectively carry out their
responsibilities to oversee payment systems. While the primary responsibility for ensuring payment system
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safety and efficiency lies with system owners and operators, central banks need adequate powers and resources
to administer their oversight responsibilities effectively. Today, in the majority of national jurisdictions, the law
grants the central bank important powers to carry out oversight, in particular those actions to obtain timely
information and to induce change or enforce corrective action, as well as to cooperate with other relevant
authorities as necessary. Over recent years, central banks have increased considerably the (financial and
human) resources assigned to payment system oversight functions.

Oversight objectives
15. Oversight aims to ensure that payment systems:

i. operate smoothly and efficiently for all participants and users,

ii. prove to be robust against risks, in particular, the risk of transmitting shocks through the economy,
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iii. pursue over time the level of technological and institutional development necessary to satisfy the
payment needs of a growing, open, and internationally integrated economy, and (increasingly),
iv. support financial inclusion.

6 See “Principles for financial market infrastructures”, joint report by the Committee on Payment and Settlement Systems and the
International Organization of Securities Commissions, Bank for International Settlements, Basel, April 2012.
7 See “Responsibilities of central banks, market regulators, and other relevant authorities for financial market infrastructures”,
under the “Principles for financial market infrastructures”, referred to in Footnote 6.
8 Annex I reports a list with a brief description of the risks typically featured by payment systems.

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