The key functions of central banks include issuing cash, implementing monetary policy to regulate economic conditions, supervising banking and financial institutions to ensure the reliability of their operations, and overseeing and regulating the operation of payment systems.
The creation of conditions for the efficient and reliable functioning of the PS is one of the priority tasks of central banks, since these conditions contribute to the maintenance of the normal operation of the banking and financial markets and the conduct of monetary policy. The organization of such a PS assumes on the part of the central bank control, protection and ensuring the smooth functioning of the PS, taking into account all its elements and the interrelationships between them.
The effectiveness of the PS is ensured when the transfer of funds is carried out in the most convenient way for all its users. The criteria for assessing the effectiveness of the PS functioning can be economic costs, the time of execution of the final payment, the availability of flexibility in the use of infrastructure, as well as the existence of optimal methods for resolving disputes, etc. | Vanzhelisti, 2008].
The reliability of the PS is expressed in its ability to transfer funds in such a way that the safety, traceability and legal force of the transactions performed in the PS are observed. Such reliability is possessed, for example, of payments made through accounts with the central bank (Vanjelisti, 2008). The point is that only the central bank can guarantee the finality of settlements in legal tender. No commercial bank has a comparable level of liquidity at its disposal for transferring funds.
According to the guiding principles declared by the CPSS for the development of the national payment system, the role of the central bank is key. It can act as:
For example, the Bank of Russia is the operator of its own payment system, coordinates and regulates settlement relations in Russia, monitors the activities of private payment systems, defining the main criteria for their operation, sets the rules, forms, terms and standards for non-cash payments, and also organizes cash circulation. Moreover, in order to increase the transparency of the payment system, the Bank of Russia is developing a procedure for compiling and submitting statistical reports characterizing the Russian payment system.
Modern international economic relations are largely interdependent. Accordingly, the role of cross-border payment systems (for example, using SWIFT) is increasing, the relationship between SIPS and the critical technical infrastructure, whose providers are involved in the globalization process, is increasing. All this requires the organization of joint oversight of central banks over the PS, which should be based on the following principles:
Taking into account that in the context of globalization of financial markets, PS cannot be assessed separately, the PC PC also emphasizes that it is necessary to ensure the security of settlement and payment systems in their interaction with each other and with system participants. In June 2008, a report was published on the interdependence of payment and settlement systems. It provides the following guidelines for central banks:
The creation of conditions for the efficient and reliable functioning of the PS is one of the priority tasks of central banks, since these conditions contribute to the maintenance of the normal operation of the banking and financial markets and the conduct of monetary policy. The organization of such a PS assumes on the part of the central bank control, protection and ensuring the smooth functioning of the PS, taking into account all its elements and the interrelationships between them.
The effectiveness of the PS is ensured when the transfer of funds is carried out in the most convenient way for all its users. The criteria for assessing the effectiveness of the PS functioning can be economic costs, the time of execution of the final payment, the availability of flexibility in the use of infrastructure, as well as the existence of optimal methods for resolving disputes, etc. | Vanzhelisti, 2008].
The reliability of the PS is expressed in its ability to transfer funds in such a way that the safety, traceability and legal force of the transactions performed in the PS are observed. Such reliability is possessed, for example, of payments made through accounts with the central bank (Vanjelisti, 2008). The point is that only the central bank can guarantee the finality of settlements in legal tender. No commercial bank has a comparable level of liquidity at its disposal for transferring funds.
According to the guiding principles declared by the CPSS for the development of the national payment system, the role of the central bank is key. It can act as:
- - an operator or a payment service provider, when it provides its communications for transferring information about payments, gives overdraft loans to restore liquidity, performs gross settlements, etc.;
- - a catalyst by initiating and coordinating, conducting research and consultations on the design and functioning of the PS, developing draft laws on the PS in the field of managing the general structure and activities of the PS of the country;
- - the regulator, since PS operators must obtain a license from the central bank and report to it;
- - oversight body: central banks have traditionally been involved in the creation and management of key PSs. Central bank oversight activities are based on: monitoring, setting standards, verifying compliance with standards, and stimulating changes in existing and planned systems;
- - user: the central bank itself can participate in clearing and settlement systems when carrying out foreign exchange transactions and refinancing elements of the banking system, since bank accounts with the central bank are used for settlements on interbank payments | Bank of Russia, 2008a].
For example, the Bank of Russia is the operator of its own payment system, coordinates and regulates settlement relations in Russia, monitors the activities of private payment systems, defining the main criteria for their operation, sets the rules, forms, terms and standards for non-cash payments, and also organizes cash circulation. Moreover, in order to increase the transparency of the payment system, the Bank of Russia is developing a procedure for compiling and submitting statistical reports characterizing the Russian payment system.
Modern international economic relations are largely interdependent. Accordingly, the role of cross-border payment systems (for example, using SWIFT) is increasing, the relationship between SIPS and the critical technical infrastructure, whose providers are involved in the globalization process, is increasing. All this requires the organization of joint oversight of central banks over the PS, which should be based on the following principles:
- - full transparency in the relationship between various authorities;
- - clarity of roles;
- - active cooperation;
- - due attention to monetary policy issues.
Taking into account that in the context of globalization of financial markets, PS cannot be assessed separately, the PC PC also emphasizes that it is necessary to ensure the security of settlement and payment systems in their interaction with each other and with system participants. In June 2008, a report was published on the interdependence of payment and settlement systems. It provides the following guidelines for central banks:
- 1. Understand how interdependence can affect systems overseen by the central bank.
- 2. Analyze the extent to which central bank policy encourages monitored systems and other organizations to address the risks of interdependence.
- 3. Regularly assess whether the central bank is making sufficient efforts with other authorities to address coordination problems in the face of increasing interdependence of systems (BIS, 2008).
