In addition to other factors, the smooth functioning of payment and settlement systems is crucial for achieving financial stability. Besides financial risks, operational risks also affect the stability of these systems, as system errors jeopardise business continuity.
Operational risk is the risk of unexpected losses arising due to errors in information systems, human errors or the incorrect decisions of an operator. Since payment and settlement systems are becoming increasingly dependent on information systems, the reliability of these systems has become a key element of operational risk. Operational errors in payment and settlement systems can lead to various problems: late or unsuccessful settlements due to operational difficulties, non-compliance with legal obligations and related costs, loss of a transaction or reputation and increased financial risks in the system itself and from the interdependence between payment and settlement systems. Because the financial markets of individual countries are strongly linked, an event that occurs in one market infrastructure could trigger a domino effect, and spread to other systems.
Ensuring business continuity encompasses several measures whose objective is to ensure
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an agreed level of services, even when an error or failure occurs in one or several components of a specific payment or settlement system, or when a specific system is affected by extraordinary external events, such as natural disasters or terrorist attacks. Business continuity is ensured by taking preventive measures and measures when extraordinary events occur.
The exchange of information regarding the business continuity of payment and settlement systems is crucial for promoting the effectiveness of business continuity among all participants on financial markets throughout Europe. That is also the intent of this website. This is particularly important due to the use of a common infrastructure by participants from different countries and due to the high level of interdependency of the infrastructure.
The primary objectives of the exchange of information on central bank websites are to simplify coordination in extraordinary circumstances, and to ensure easy access to international and national standards, initiatives, requirements and agreements regarding payment and settlement system business continuity.
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Payment and Settlement Systems