Payment Systems: Design, Governance and Oversight

To produce this handbook for those who oversee, operate and use payment systems, editor Bruce J. Summers draws on his three decades of experience in payment systems at the Federal Reserve and as a consultant for the World Bank, International Monetary Fund and central banks and brings together authors with practical industry experience from around the world. Contributions from: Joaquin Bernal, Central Bank of Colombia; Ron Berndsen,The Netherlands Bank; Hemant Baijal, formerly The World Bank; Wilko Bolt, The Netherlands Bank; Sujit Chakravorti, The Clearing House; Terry Goh, Monetary Authority of Singapore; Philipp Haene and Robert Oleschak, Swiss National Bank; Richard Heckinger, Federal Reserve Bank of Chicago; Daniel Heller, Swiss National Bank; Esmond Lee, Hong Kong Monetary Authority; Ricardo Medina-Alvarez, Bank of Mexico; Harish Natarajan, The World Bank; Knut Sandal, Norges Bank; G. Srinivas, Reserve Bank of India; Larry Sweet, Federal Reserve Bank of New York; Harry Newman, SWIFT; Carlo Tresoldi, SIA; and John Trundle, Euroclear. The role of payment and settlement systems in mitigating financial risk and ensuring financial stability during the recent economic crisis followed by initiatives to increase their use in the OTC markets for credit default swaps have become headline news in the financial press. Further, the efficiency and safety of retail payment systems now command attention due to the prominence of the consumer sector in modern economies (for example, an estimated US$225 billion in non-cash retail payments are made each day in the United States alone). Public sector overseers have adopted a broad system-wide perspective that relies on official guidance as well as regulation to achieve public policy goals for safety, effectiveness, and efficiency. Their official guidance includes international standards for the design and operation of payment and settlement systems promulgated by the Bank for International Settlements. The timeliness of this book is underscored by the BIS announcing a comprehensive review of the international standards in February 2010.

Table of Contents:
Foreword Masaaki Shirakawa Editor's preface About the editor List of contributors List of abbreviations PAYMENT SYSTEMS - WHY THEY MATTER Payment system design and public policy Bruce Summers The importance of financial market infrastructures Daniel Heller The interbank money market and its underpinning infrastructure Terry Goh Securities markets: a European central securities depository perspective Marc Robert-Nicoud Derivatives markets Richard Heckinger Foreign exchange, systemic risk and central bank strategy Mandy Lam Trade repositories Richard Heckinger The importance of the general purpose payment system Jonathan Williams Payments systems for individuals, corporates and governments Carlo Tresoldi Innovation in retail payments Hemant Baijal and Harish Natarajan Central bank payment services Sean O'Connor GOVERNANCE - ENSURING PERFORMANCE EXCELLENCE The governance of payment systems: a UK blueprint Paul Smee Access to central bank accounts and services for payment systems Joaquin Bernal The importance of payment system standards Harry Newman Pricing in retail payment: a public policy perspective on pricing of payment cards Wilko Bolt and Sujit Chakravorti Purpose of oversight Lawrence Sweet Organising the oversight function Knut Sandal Payment and settlement systems oversight: methods and tools Ron Berndsen Risk management in payment systems John Trundle CASE STUDIES Twenty-five years of Swiss Interbank Clearing: a review Philipp Haene and Robert Oleschak Foreign currency payment systems in Hong Kong Esmond Lee SEPA: the design, management and supervision of the euro payments market Gerard Hartsink Mobile payments innovation, financial inclusion and oversight: an Indian perspective G. Srinivas Oversight as catalyst for innovation in Mexico Ricardo Medina-Alvarez

About the Author :
Bruce J. Summers was National Product Manager for Fedwire and ACH, and served as Deputy director at the Board of Governors for payment system policy and oversight of the banking services and IT activities of the 12 Federal Reserve Banks. He has contributed to the international initiatives of central banks through the BIS and to the work of the Fund and World Bank. He retired from the Fed in 2007 as Director of Federal Reserve Information Technology and now consults on payment systems and technology management.

Review :
"This well-timed book offers illuminating perspectives for not only central bankers but also a wide range of readers who are interested in the integrity of payment and settlement systems. I have no hesitation in calling this book a tour de force." Masaaki Shirakawa, Governor, Bank of Japan