Topics and publications
Updated 11 December 2015
Overview
Most reports published by the CPMI are analytical and explore various issues related to payment, clearing and settlement systems or, more specifically, to large-value payment systems, retail payment instruments and systems, settlement mechanisms for foreign exchange transactions, securities clearing and settlement systems, and clearing and settlement mechanisms for derivatives transactions.
1. Payment systems: general issues
General guidance for national payment system development (January 2006) provides guidance for central banks and other stakeholders on the planning and implementation of payment system reforms, including an overview of institutional and infrastructural arrangements that should be taken into account.
Central bank oversight of payment and settlement systems (May 2005) explains why and how central banks oversee payment and settlement systems. Central bank oversight promotes the objectives of safety and efficiency by monitoring existing and planned systems, assessing them against these objectives and, where necessary, inducing change.
The role of central bank money in payment systems (August 2003) studies various aspects of central bank money including banknotes and current accounts, primarily focusing on its function in payment systems. It considers access to central bank accounts, services provided by central banks, policies on settlement in central bank money, and alternatives to the use of such money.
2. Large-value payment systems
New developments in large-value payment systems (May 2005) takes stock of developments that have taken place since the publication in 1997 of Real-time gross settlement systems. Some new large-value payment systems settle faster, with a lower amount of liquidity and at a lower cost. Recent developments in system design allow more flexibility in addressing the trade-offs between achieving lower risks and lower costs than traditional architectures.
3. Retail payment instruments and systems
Digital currencies (November 2015) provides an initial analysis of the main factors influencing the development of digital currencies and offers an overview of the potential wider implications of the use of distributed ledgers.
Non-banks in retail payments (September 2014) analyses the factors influencing the growing importance of non-banks, the main implications for both the efficiency of and risks in retail payment systems (including their possible influence on financial inclusion) and the diverse regulatory approaches in various jurisdictions.
Innovations in retail payments (May 2012): (i) catalogues innovative developments in retail payments in the CPSS and several other countries; (ii) identifies common characteristics among those innovations and appropriate ways of classifying them; (iii) identifies drivers for and barriers to innovation; and (iv) identifies potential issues and challenges for central banks.
General principles for international remittance services (January 2007) provides an analysis of the payment aspect of remittances and sets out general principles designed to assist.
Policy issues for central banks in retail payments (March 2003) explores the involvement of the CPSS member central banks at that time plus Australia in retail payments. Although these countries display significant institutional differences, they also share common policy themes, presented in the report as high-level public policy goals. The report recommends minimum actions for central banks to further these goals and also identifies additional options that could be used in certain circumstances. It follows two previous publications on retail payments: Retail payments in selected countries: a comparative study (September 1999), which compares retail payment instruments used in the CPSS countries and Australia; and Clearing and settlement arrangements for retail payments in selected countries (September 2000), which analyses systems that are used to effect, clear and settle payments initiated with particular retail payment instruments.
A Survey of electronic money developments, which has been carried out regularly since 19961, provides information on electronic money products planned or in use and on relevant domestic policies. The Survey of developments in electronic money and internet and mobile payments (March 2004) extends the survey to other innovative products for small-value payments and covers 96 countries and territories. In August 1996 the CPSS and the G10 Group of Computer Experts jointly published a report on the Security of electronic money, describing the security measures that can be taken to protect electronic money products.2
4. Securities clearing and settlement systems
The CPSS and IOSCO jointly published Securities lending transactions: market developments and implications (July 1999), which analyses securities lending (including repo) transactions and their implications for market participants, infrastructure providers and market authorities. It also addresses the risks present in these transactions and the practices and procedures used by market participants to manage and reduce them.
The Disclosure framework for securities settlement systems (February 1997) encourages regulatory and supervisory bodies worldwide to ask system operators in their jurisdictions to complete a questionnaire and make the responses available to market participants. References to publicly available responses can be found on the respective BIS and IOSCO websites.
Cross-border securities settlements (March 1995) studies the channels used by market participants for cross-border securities transactions, identifies the different risks that these arrangements may pose and stresses the importance of understanding the procedures used to effect cross-border settlements. Assessing the risks involved in cross-border securities settlement arrangements may pose challenges to market participants, due to their complexity and lack of transparency.
Delivery versus payment in securities settlement systems (September 1992) defines and analyses the types and sources of risk in securities settlement systems, clarifies the meaning of delivery-versus-payment (DvP) and describes three common approaches to achieving DvP, each of which entails different risks to market participants. The report also provides a framework for evaluating the implications of the design and operation of DvP systems for financial stability.
5. Foreign exchange settlement
Settlement practices for foreign exchange (FX) transactions may expose market participants to the risk of paying the funds they owe on a trade but not receiving the funds due by their counterparty. Although the probability of a major disruption in the foreign exchange settlement process is low, the potential consequences of such a disruption are considerable. Central banks are concerned about the effects of large settlement exposures on the safety and soundness of banks, the adequacy of market liquidity, market efficiency and overall financial stability.
The 1993 report on Central bank payment and settlement services with respect to cross-border and multi-currency transactions examined possible central bank service options that might decrease risk in the settlement of FX trades.
Settlement risk in foreign exchange transactions (March 1996) provides a definition of FX settlement risk and a method to measure it. The report sets out a strategy to reduce that risk, based on action by individual banks to measure and control their own exposures; by industry groups to develop well-constructed multicurrency services, including netting schemes; and by central banks and other relevant authorities to encourage private sector action in their domestic markets and to consider enhancements to national payment systems.
In the following years, significant progress was made in implementing the strategy. However, many banks were still not managing their exposures appropriately and industry efforts had still not realised their full risk-reducing potential. In light of this, the G10 central banks decided to reaffirm and strengthen the strategy in the July 1998 follow-up report Reducing foreign exchange settlement risk: a progress report. Amongst other things, the BCBS was invited to develop international supervisory guidance for banks on the prudential management and control of FX settlement risk. This guidance was published in September 2000 and is available on the BIS website.
Progress in reducing foreign exchange settlement risk (May 2008) analyses the progress that has been made over the past ten years in reducing foreign exchange settlement risk. In spite of the success of CLS Bank, a notable share of FX transactions is settled in ways that still generate significant potential risk. The report recommends specific further action by banks, industry groups and central banks.
Supervisory guidance for managing risks associated with the settlement of foreign exchange transactions (February 2013) is an updated guidance to banks and their supervisors on approaches to managing the risks associated with the settlement of FX transactions, which expands on, and replaces, the BCBS's Supervisory guidance for managing settlement risk in foreign exchange transactions published in September 2000. This report provides a more comprehensive and detailed view on governance arrangements and the management of principal risk, replacement cost risk and all other FX settlement-related risks. In addition, it promotes the use of payment-versus-payment arrangements, where practicable, to reduce principal risk.
6. Clearing and settlement arrangements for derivatives transactions
Guidance on the application of the 2004 CPSS-IOSCO Recommendations for Central Counterparties to OTC derivatives CCPs (May 2010, consultative report) presents guidance on the application of the 2004 CPSS-IOSCO Recommendations for Central Counterparties (RCCP) to the CCPs clearing over-the-counter (OTC) derivatives products (OTC derivatives CCPs). The findings of this consultative report have been incorporated to the report on Principles for financial market infrastructures (April 2012).
New developments in clearing and settlement arrangements for OTC derivatives (March 2007) analyses existing arrangements and risk management practices in the OTC derivatives market and evaluates the potential for risks to be mitigated by greater use of, and enhancement to, market infrastructure. This report follows-up on OTC derivatives: settlement procedures and counterparty risk management (September 1998), which had been drafted together with the CGFS (then the "Euro-currency Standing Committee").
Clearing arrangements for exchange-traded derivatives (March 1997) describes different arrangements and identifies possible weaknesses. It recommends stress testing by clearing organisations, timely trade matching for the calculation of margin requirements and the use of payment systems offering intraday finality.
7. General infrastructure issues
Recovery of financial market infrastructures (August 2013) provides guidance to financial market infrastructures such as CCPs on how to develop plans to enable them to recover from threats to their viability and financial strength that might prevent them from continuing to provide critical services to their participants and the markets they serve.
Principles for financial market infrastructures (CPSS/IOSCO, 2012). The new standards replace the three existing sets of international standards set out in the Core principles for systemically important payment systems (CPSS, 2001); the Recommendations for securities settlement systems (CPSS-IOSCO, 2001); and the Recommendations for central counterparties (CPSS-IOSCO, 2004). CPMI and IOSCO have strengthened and harmonised these three sets of standards by raising minimum requirements, providing more detailed guidance and broadening the scope of the standards to cover new risk-management areas and new types of FMIs.
Report on OTC derivatives data reporting and aggregation requirements (data report) (January 2012) discusses data necessary for monitoring the impact of OTC derivatives markets on financial stability. It specifies minimum requirements for reporting transaction data to trade repositories, including the acceptable types of data formats, and discusses access to data by authorities, reporting entities and the public. Authorities' access to trade repository data (August 2013) provides guidance to TRs and authorities on the principles that should guide authorities' access to data held in TRs for typical and non-typical data requests.
Market structure developments in the clearing industry: implications for financial stability (November 2010) assesses how far developments in clearing industry in the last decade have given rise to new risks. It then outlines practical issues that central banks, regulators and overseers may wish to consider, either as part of their oversight role or in the context of their broader financial stability remit.
Strengthening repo clearing and settlement arrangements (September 2010) presents a comprehensive survey of the clearing and settlement arrangements for repos in selected CPSS member countries at that time and identifies several issues related to clearing and settlement arrangements for repos that have the potential to affect the resilience of repo markets.The report then outlines options and measures through which these issues can be addressed.
Considerations for trade repositories in OTC derivatives markets (May 2010, consultative report) presents a set of considerations for trade repositories (TRs) in over-the-counter (OTC) derivatives markets. The findings of this consultative report have been incorporated into the report on Principles for financial market infrastructures (April 2012).
The interdependencies of payment and settlement systems (June 2008) identifies the various interdependencies that exist among the systems of CPSS countries at that time, analyses the risk implications of these interdependencies, and assesses any associated risk management challenges.
Cross-border collateral arrangements (January 2006) analyses the possibility for central banks to accept collateral denominated in a foreign currency or located in a foreign jurisdiction to support intraday or overnight credit, either routinely or in extraordinary situations, and existing institutional arrangements as well as alternative models for the acceptance by central banks of foreign collateral.
1 Following a request by the G10 Governors to closely monitor global developments of electronic money products and potential policy issues.
2 Furthermore, drawing on the work done by the CPSS and by G10 monetary policy experts, in October 1996 the BIS published Implications for central banks of the development of electronic money, which summarises many of the key issues that may be raised by the emergence of electronic money schemes. The analysis carried out by the G10 central banks has provided useful input to the work of other international groups dealing with e-money issues, including the G10 Deputies and the Financial Action Task Force.