Switzerland: Technical Note-Oversight, Supervision, and Risk Management of Financial Market Infrastructures

International Monetary Fund

No 2014/270, IMF Staff Country Reports from International Monetary Fund

Abstract: This Technical Note on Oversight, Supervision, and Risk Management of Financial Market Infrastructures explains that financial market infrastructures (FMIs) in Switzerland are well-developed and stable. The FMIs operate smoothly for many years without any substantial outage or other technical or financial problem. Payment in Swiss francs, both large value and retail payments, are settled in the Swiss Interbank Clearing, which is a real time gross settlements system. Important progress has been realized regarding the adoption of the new principles for FMIs. FMIs should continue their efforts to achieve full compliance. The new Swiss Financial Market Infrastructure Act should be passed by Parliament to complete the process. Although the risk management framework of SIX Group AG is comprehensive it has certain gaps that need to be addressed to fully observe the new international standards. The Swiss National Bank (SNB) and Financial Market Supervisory Authority (FINMA) are encouraged to hold a firm stance on the full implementation of the new principles in Switzerland. The SNB and FINMA should upgrade their domestic and foreign cooperation arrangements to be able to handle crisis events effectively and in a timely manner. The domestic cooperation arrangements work well in normal circumstances but may prove insufficient during crisis events in the absence of a lead supervisor or overseer of the FMIs.

Keywords: ISCR; CR; risk management framework; organization structure; recovery plan; SIX SIS AG; FINMA regulation; managed FMIs; PFM information systems; Crisis management framework; Principles for Financial Market Infrastructures; Central counterparty clearing house; Payment systems; Europe (search for similar items in EconPapers)
Pages: 37
Date: 2014-09-03
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