SWIFT announces the publication of its latest whitepaper ‘Reducing Risk and Increasing Resilience in RTGS Payment Systems’.
The whitepaper provides an overview of the payments systems landscape and the systemically important role of the RTGS. It describes the risk and resiliency issues that these Market Infrastructures face, the impact of the new regulatory benchmarks that are being set and the best practices used in RTGS resiliency planning.
Juliette Kennel, Global Head of Market Infrastructures at SWIFT, stresses the key role that high-value RTGS payment systems play in domestic and global economies, "resiliency of the country’s financial eco-system is vital, especially given that risk mitigation is high on the agenda of regulators and Market Infrastructures alike".
In response, most RTGS systems have a ‘hot standby’ backup site, and sometimes even a third site to mitigate the risk of threats. In the unlikely, but possible, event of primary and backup loss, the central bank may have to revert to bi-lateral settlement between counterparties, using largely manual processes, at much reduced volumes levels.
Stephane Ernst, HVP Market Manager at SWIFT, explains that the market has been searching for an alternative solution, "As a large number of the worlds’ RTGS systems use SWIFT messaging over the SWIFT network, it makes sense that SWIFT has been working with a group of central banks to develop an innovative and cost effective solution". Ernst adds, "we think that our solution, called ‘Market Infrastructure Resiliency System’ or ‘MIRS’, can help the community with these significant challenges by supporting the new evolving practices in terms of geographic, staff and technical diversity”.
In addition, Market Infrastructure resiliency will be a major theme of this years’ MI Forum at Sibos in Boston, click here to preview the agenda.
The whitepaper can be downloaded hereunder :