G10 Governors approve 'Core Principles for Systemically Important Payment Systems'

The central bank Governors of the Group of Ten (G10) countries in their January meeting approved the release of a key set of standards that will contribute to the soundness of financial systems. "Core Principles for Systemically Important Payment Systems", a report of the Task Force on Payment System Principles and Practices of the Committee on Payment and Settlement Systems (CPSS), sets out principles that can be applied in all countries.

A press conference for this report, and for another CPSS-IOSCO Joint Task Force consultative report, Recommendations for Securities Settlement Systems, will be held at 10 am GMT on Monday 15 January at the Bank of England, London.

The Core Principles fulfil the public policy objectives of reducing risk, achieving safety and increasing efficiency in systemically important payment systems by outlining a common set of universal international standards. In carrying out its work, the Task Force collaborated with groups of central banks in Africa, the Americas, Asia, the Pacific rim and Europe. Two rounds of public consultation in December 1999 and June 2000 produced an international consensus on the Principles, reflecting strong and widespread support for the initiative.

The report has been recognised by the Financial Stability Forum (www.fsforum.org) as a significant contribution to high-level efforts to strengthen financial systems, through the identification and filling of gaps in international standards. The Core Principles are already being used to guide oversight and reform as needed to achieve compliance. They are also being used by international institutions in the promotion of international standards, most importantly in the Financial Sector Assessment Program of the Bretton Woods institutions. In approving the release of the report, the Governors encouraged close cooperation between the CPSS, the International Monetary Fund, the International Bank for Reconstruction and Development and, where appropriate, other entities, in order to assure coordinated interpretation and implementation of the Principles.

The Core Principles are generic in nature and detail the key characteristics that all systemically important payment systems should satisfy. They do not represent a blueprint for the design or operation of any individual system, but are intended to be used by countries to assess their own systems and develop appropriate strategies for compliance.

The Core Principles report is divided into two parts. Part 1 of the report outlines the 10 Core Principles and the responsibilities of central banks for their application, while Part 2 provides interpretation of the Principles and practical guidance for their implementation.

The Task Force was established in May 1998 and chaired by John Trundle of the Bank of England. Its membership included payment systems experts from the G10 and 11 other national central banks, the European Central Bank, the International Monetary Fund and the World Bank. In approving the report, the Governors acknowledged the contributions of Tommaso Padoa-Schioppa, current Chairman of the CPSS, and his predecessor Wendelin Hartmann.

The CPSS serves as a forum for the central banks of the G10 countries to monitor and analyse developments in payment and settlement arrangements and to consider related policy issues. Non-G10 central banks are increasingly involved in the Committee's work. Mr Padoa-Schioppa is a member of the Executive Board of the European Central Bank and also represents the CPSS in the Financial Stability Forum.

Press conference for the report

As mentioned above, a press conference for this report, and for another CPSS-IOSCO Joint Task Force consultative report, Recommendations for Securities Settlement Systems, will be held at 10 am GMT on Monday 15 January at the Bank of England, London. At least the following persons will attend:

• Tommaso Padoa-Schioppa, Member of the Executive Board of the European Central Bank, Chairman of the CPSS
• John Trundle, Head of the Market Infrastructure Division of the Bank of England, Chairman of the CPSS Task Force on Payment System Principles and Practices - for the report on payment systems
• Patrick Parkinson, Associate Director, Division of Research and Statistics of the Board of Governors of the Federal Reserve System, Co-Chairman of the CPSS-IOSCO Joint Task Force on Securities Settlement Systems
• Giovanni Sabatini, Head of the Market Regulation Office of the Commissione Nazionale per le Società e la Borsa (Italy), Chairman of IOSCO Technical Committee Working Party 2, Co-Chairman of the CPSS-IOSCO Joint Task Force on Securities Settlement Systems

Gregor Heinrich, Head of the CPSS Secretariat, will also be present.

Specific questions regarding these reports and the press conference may be sent to the CPSS by e-mail (cpss@bis.org) or fax (+41 61 280 9100); alternatively, for further information please phone the press enquiries number given above. Additionally, logistical information concerning the press conference may be obtained from the Bank of England at +44 20 7601 5630/4394.

Notes to editors

The Secretariat of the CPSS is located at the Bank for International Settlements (BIS). The Head of Secretariat is Mr Gregor Heinrich. A list of CPSS publications as well as the full text of a number of recent reports are available on the BIS website at www.bis.org [publications].