Policy issues
Oversight objectives
The Eurosystem has an interest in the smooth functioning of payment systems and instruments.
Oversight aims at
- preventing systemic risk,
- promoting efficiency of payment systems and instruments,
- ensuring security of and public trust in the currency, and
- safeguarding the transmission channel for monetary policy.
Oversight of payment systems
Payment systems interlink banks and other financial intermediaries. In a crisis situation,
problems can spread through such links from the problem institution to other institutions.
This can endanger the stability of the financial infrastructure and is known as
systemic risk. Oversight aims at ensuring that the systems are set up in such
a way as to minimise the risk potential.
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Oversight of payment instruments
The Eurosystem has an interest in the safety and efficiency of credit transfers, card payments
and other payment instruments. Such instruments are widely used in the economy. If they did not
function properly, this could undermine confidence in the currency.
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Securities infrastructure
The ECB has an interest in the proper functioning of securities clearing and settlement systems (SCSSs).
Any major malfunction could endanger:
- the smooth implementation of monetary policy,
- the smooth functioning of payment systems, and
- the overall stability of the financial system in the euro area.
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Catalyst for change
The Eurosystem also plays a catalyst role: the central banks express a general
aim but leave it to the market to define the most appropriate response. This
approach is used,
for example, in the development of a pan-European euro retail payments infrastructure.
The Eurosystem supports market initiatives, such as the establishment of
a single
euro payments area (SEPA)
and integration in the securities market and infrastructure.
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Eurosystem policy principles
The Eurosystem policy principles on the location and operation of infrastructures settling euro-denominated payment transactions do not constitute a new Eurosystem policy stance but further specify the position of the Eurosystem laid down and made public in the 1998 Policy statement on euro payment and settlement systems located outside the euro area and the 2001 Eurosystem's policy line with regard to consolidation in central counterparty clearing. They apply to any existing or potential payments infrastructure located outside the euro area that settles euro transactions.
In the context of the implementation of the European Code of Conduct for Clearing and Settlement, an issue has been raised concerning the compatibility of the “Eurosystem’s policy line with regard to consolidation in central counterparty clearing” of September 2001 and the Code of Conduct, with specific reference to the implementation of links between clearing systems located in and outside the euro area. In this context the Eurosystem has developed the terms of reference below.
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The Eurosystem policy principles on the location and operation of infrastructures settling euro-denominated payment transactions: specification of “legally and operationally located in the euro area”, 20 November 2008,
en 105 kB
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The Eurosystem's policy line with regards to consolidation in central counterparty clearing, 27 September 2001,
en 21 kB
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Eurosystem statement on central counterparties and interoperability, terms of reference, 28 March 2008
en 19.5 kB
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The Eurosystem policy principles on the location and operation of infrastructures settling euro-denominated payment transactions,
29 kb,
en
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