Apr 01, 2013
March 22nd 2013 - The Reserve Bank today released a consultation paper on proposals to strengthen the powers for its oversight of payment and settlement systems.
Reserve Bank Deputy Governor Grant Spencer said payment systems are an important component of a sound and efficient financial system, and a recent review concluded that the Bank’s existing oversight powers need to be strengthened.
“The need for formal strengthened powers has become more important over recent years, because of the fast-changing payments landscape and the increasingly critical roles played by systemically important payment and settlement systems in the financial system.
“Improved oversight would also help to avoid any significant damage to the financial system that could result from the failure of a participant in a payment system, unlikely though that might be.”
The proposals include formally recognising systemically important payment and settlement systems and subjecting them to increased oversight; giving the Reserve Bank powers to impose conditions and give directions to system operators; and setting up a tailored statutory management regime for such systems.
The Reserve Bank also proposes adopting a co-regulatory model with the Financial Markets Authority for securities settlement systems.
“These additional powers will bring the Reserve Bank into line with other central banks, and better reflect the international regulatory developments in the payment oversight area, brought about by the global financial crisis,” Mr Spencer said.
The Reserve Bank has consulted with the Ministry of Business, Innovation and Employment and Treasury while developing the proposals.
Re-disseminated by The Asian Banker