In 1980 the Governors of the central banks of the Group of Ten (G10) countries set up a Group of Experts on Payment Systems, whose purpose was to take forward the work on payment system issues identified by the G10 Group of Computer Experts. One of the Group's first projects, a detailed review of payment system developments in the G10 countries, was published by the BIS in 1985 in the first of a series that has become known as "Red Books". 1 The Group also analysed interbank netting schemes in the Report on netting schemes, published by the BIS in 1989. The Group of Experts on Payment Systems was chaired successively by George Blunden of the Bank of England (1980-82), Hans Meyer of the Swiss National Bank (1983-88) and Wayne Angell of the Board of Governors of the Federal Reserve System (1988-90).
In 1989 the G10 Governors set up an ad hoc Committee on Interbank Netting Schemes (chaired by Alexandre Lamfalussy, then General Manager of the BIS) to study in more detail the policy issues relating to cross-border and multicurrency interbank netting schemes. Its report, published in 1990, contains a set of minimum standards for the operation of bilateral and multilateral cross-border and multicurrency netting schemes and sets out the G10 central banks' framework for the cooperative oversight of such systems.
In 1990 the G10 Governors established the Committee on Payment and Settlement Systems, as a follow-up to the work of the Committee on Interbank Netting Schemes, and more generally to take over and extend the activities of the Group of Experts on Payment Systems. The CPSS was set up as one of the permanent central bank committees reporting to the G10 Governors. 2
First in 1997-1998 and then in 2009, the membership of CPSS was enlarged so that it now includes 25 central banks. In order to reflect this enlarged membership of the CPSS, the committee now reports to the Governors of the Global Economy Meeting instead of the G10 Governors.
Organisation and focus of activities
The CPSS consists of the Reserve Bank of Australia, National Bank of Belgium, Central Bank of Brazil, Bank of Canada, The People's Bank of China, European Central Bank, Bank of France, Deutsche Bundesbank, Hong Kong Monetary Authority, Reserve Bank of India, Bank of Italy, Bank of Japan, Bank of Korea, Bank of Mexico, Netherlands Bank, Monetary Authority of Singapore, Sveriges Riksbank, Swiss National Bank, Central Bank of the Russian Federation, Saudi Arabian Monetary Agency, South African Reserve Bank, Central Bank of the Republic of Turkey, Bank of England, Board of Governors of the Federal Reserve System, Federal Reserve Bank of New York.
Since March 2012 Paul Tucker, Deputy Governor, Financial Stability, of the Bank of England has been Chairman of the Committee. The Committee was previously chaired by Wayne Angell, Member of the Board of Governors of the Federal Reserve System (1990-94); William McDonough, President and CEO of the Federal Reserve Bank of New York (1994-98); Wendelin Hartmann, Member of the Board of the Deutsche Bundesbank (1998-2000); Tommaso Padoa-Schioppa, Member of the Executive Board of the European Central Bank (2000-05); Timothy Geithner, President and Chief Executive Officer of the Federal Reserve Bank of New York (2005-09); and William C Dudley, President of the Federal Reserve Bank of New York (2009-2012).
The CPSS addresses general concerns regarding the efficiency and stability of payment, clearing, settlement and related arrangements, and pays attention to issues related to these systems or arrangements and to their relation with the major financial markets that are relevant for the conduct of monetary policy. For this purpose, it undertakes specific studies at the request of the Governors of the Global Economy Meeting or at its own discretion, and working groups are set up as required.
Cooperation with non-CPSS central banks and other organisations
The CPSS cooperates with other groups, including the International Organization of Securities Commissions (IOSCO), the Basel Committee on Banking Supervision (BCBS) and the Financial Stability Board (FSB), to address issues of common concern. In the context of its activities the Committee maintains contact with many global payment system providers, industry associations and regulatory authorities.
The CPSS has developed relationships with other central banks, particularly in emerging market economies. In collaboration with the respective central banks and the BIS, it has published a number of Red Books on payment systems in non-CPSS countries. The Committee provides, if so requested and whenever possible, substantive expertise on payment system issues and organisational support to various regional central banking organisations by providing speakers and/or co-organising seminars and workshops. It works together, for instance, with CEMLA in Latin America, the GCC in the Gulf Region, the AMF in Arab countries, SAARC in southern Asia, EMEAP and SEACEN in eastern and Southeast Asia, and SADC and MEFMI in southern Africa.
1 Payment systems in eleven developed countries, February 1985. A "Red Book" provides a comprehensive description of a country's payment, clearing and settlement systems to a reader who has some familiarity with payment systems in general but who knows little or nothing about the particular arrangements in that country.