Consultation announcement - Oversight of Payments Infrastructures: Eurosystem common methodology for the assessment of euro systemically and prominently important payment systems against the Core Principles

The oversight of euro payment systems is an essential function of the Eurosystem. The oversight policy of the Eurosystem relies on minimum oversight standards which payment system service providers are expected to meet, including: the “Core Principles for Systemically Important Payment Systems (G10 standards, adopted in 2001), the “Oversight Standards for Euro Retail Payment Systems” (adopted in 2003), and the “Business Continuity Oversight Expectations for Systemically Important Payment Systems” (hereafter referred to as “BCOE for SIPS”, adopted in 2006).

With the aim to support the consistent implementation of its oversight policy, the Eurosystem developed and used two sets of assessment methodologies (so-called Terms of Reference) for the assessment of payments infrastructures: one for large-value payment systems (which, in the Eurosystem’s understanding, are regarded as systemically important) and one for retail payment systems (which, depending on whether or not they fulfil certain criteria that are defined in the Eurosystem’s “Oversight standards for euro retail payment systems”, qualify as systemically important, prominently important, or other systems). The adoption of the BCOE for SIPS has led the Eurosystem to further enhance and consolidate its present oversight implementation framework.

As a result, a proposal entitled “Terms of Reference for the oversight assessment of euro systemically and prominently important payment systems against the Core Principles” (ToR) has been elaborated. The ToR aim at providing clear and comprehensive guidelines for the Eurosystem’s oversight function for the assessment of the euro payment systems classified as systemically and prominently important. The methodology includes also an implementation guide for the assessment of the BCOE for SIPS.

So far, the Eurosystem has kept its oversight assessment methodologies mainly internal but in the spirit of the Eurosystem’s transparency policy the Eurosystem strongly believes that making the single methodology publicly available will further promote payment infrastructure designers’ and operators’ understanding of overseers’ safety and efficiency concerns, give additional incentives to operators to continue their efforts of mitigating or containing the various risks their systems may face, and ultimately help them to ensure the smooth functioning of their systems. In this context, the Eurosystem stresses that ensuring compliance with the Eurosystem’s oversight policies remains the full responsibility of the operators of euro payments infrastructures.

It is intended that, after this public consultation, the final version of the single methodology will be put on the website of the ECB. The Eurosystem would like to invite all interested parties to comment on the proposal by close of business on 14 August 2007.

Any comments received will be made public on the internet, unless it is clearly indicated that the author does not consent to such publication. Comments should be sent in English or in the relevant official Community language to the ECB at the following address:

European Central Bank

Secretariat Division

Kaiserstrasse 29

D-60311 Frankfurt am Main

Germany

Fax: +49 69 1344 6170

E-mail: ecb.secretariat@ecb.int

or to the national central banks of the Eurosystem.