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As a follow-up to the Report of the Committee on Interbank Netting Schemes, the Working Group on Central Bank Payment and Settlement Services (Working Group) was established to examine a range of options that central banks might consider in an effort to help reduce risk and increase efficiency in the settlement of cross-border and multi-currency interbank transactions. The goal of the analysis was to identify and promote a common understanding of the advantages and disadvantages of different payment and settlement services that central banks might offer. The report neither recommends a preferred option nor should it be construed as indicating that central banks, either individually or as a group, are prepared to offer one or more services. Indeed, the study points out that individual central banks may weigh differently the advantages and disadvantages of various options, given their differing institutional, legal, and policy perspectives. Furthermore, the study recognises that central bank services are likely to continue to develop over time in conjunction with, or perhaps as a catalyst for, market developments.
This discussion paper is being made publicly available for two reasons. Firstly, many central banks and financial institutions are considering important changes to their home-currency payments systems. While some of these developments are motivated by domestic concerns, this report highlights how changes in certain features of home-currency payments systems can influence the risk and efficiency of international settlements. Secondly, the report emphasises the scope and need for private sector efforts to reduce risk and increase efficiency in the settlement process. In this regard, the report may serve as a useful reference document and stimulate public discussion of the means to achieve these goals.
This report should be viewed solely as the product of study by the Committee on Payment and Settlement Systems and does not necessarily represent the views of either the central banks of the G-10 countries or the Bank for Intemational Settlements. Able assistance in editing, translating and publishing the report was provided by the BIS.
Wayne D. Angell, Chairman,
Committee on Payment and Settlement Systems
and Member of the Board of Governors,
Federal Reserve System.
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