Systemically Important Payment System: Difference between revisions

Revision as of 12:32, 22 May 2024

Latest revision as of 17:20, 14 February 2025

(One intermediate revision by the same user not shown)

Line 1:

{{Short description|Designation for financial payment systems}}

A '''Systemically Important Payment System''' ('''SIPS''') is a [[payment system]]s whose failure could potentially endanger the operation of the whole economy. In general, these are the major payment clearing systems or [[real-time gross settlement]] systems of individual countries, but in the case of Europe, there are certain pan-European payment systems. As of late 2023, the [[TARGET2European Central Bank]] ishad adesignated pan-Europeanfive SIPSpayment dealingsystems withas majorSIPS, inter-banknamely payments.[[T2 (settlement system)|T2]], [[EURO1]], [[STEP2]], operated[[STET-CORE|CORE(FR)]], by theand [[EuroMastercard Banking AssociationEurope]],.<ref>{{cite isweb a|website=International majorMonetary panFund |date={{date|2023-European9-8}} clearing|url=https://www.imf.org/en/Publications/CR/Issues/2023/12/07/Belgium-Financial-Sector-Assessment-Program-Detailed-Assessment-of-Observance-Assessment-of-542179 system|title=Belgium: forFinancial retailSector paymentsAssessment whichProgram-Detailed Assessment of Observance-Assessment hasof the potentialCPSS–IOSCO toPrinciples becomefor aFinancial SIPS.Market Infrastructures Euroclear Bank}}</ref>{{rp|12}}

In the event of a bank failure, adherence to the rules for the operation of SIPS should prevent a domino effect whereby payment obligations of the failing bank are effected against the solvent banks. Clearly, this does not prevent the effects of a bank failure from spreading; however, it closes off one route.