Financial Sector Assessment Program (FSAP)

Financial Sector Assessment Program—Experience with the Assessment of Systemically Important Payment Systems

Prepared by the Staffs of the International Monetary Fund and the World Bank

April 19, 2002

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List of Abbreviations

Executive Summary

  1. Introduction

  2. Payment Systems and Oversight Approaches
    1. Payment Systems, Monetary Policy, and Financial Stability
    2. The Main Elements of a Stable, Secure and Efficient Payment System
                  The legal environment
                  The national infrastructure
                  Economic efficiency and the payment system
    1. Payment Systems and Emerging Cross-Sectoral Links
                  Securities settlement systems
                  Settlement of foreign exchange transactions
                  Resolution of problem banks
    1. The Role of the Central Bank in the Oversight of Payment Systems

  3. Core Principles for Systemically Important Payment Systems
    1. The Core Principles
                  The responsibilities of the central bank in applying the CPSIPS
    1. The Use of the CPSIPS by the Bank and the Fund

  4. The Assessment Process and the Main Findings
    1. The Assessment Process
    2. The Assessment of the CPSIPS
                  Main findings
                  Developing countries
                  Countries in transition
                  Advanced economies

  5. Assessment Recommendations and Post-Assessment Follow-Up
    1. Assessment Recommendations
                  Stability and soundness issues
                  Issues relating to the future development of the financial sector
                  Prioritization of recommendations
    1. The Authorities' Responses
    2. Follow-up and Technical Assistance

  6. Enhancing the Assessment Process
    1. Improving Assessment Modalities
    2. The Efficacy of the CPSIPS

  7. Concluding Observations

Text Tables

Table 1. Number of Experts and Cooperating Official Institutions
Table 2. Aggregate Level of Observance for All SIPS
Table 3. Aggregate Level of Observance for SIPS in Developing Countries
Table 4. Aggregate Level of Observance for SIPS in Countries in Transition
Table 5. Aggregate Level of Observance for SIPS in Advanced Economies


Box 1. Payment Systems, Monetary Policy, and Financial Stability
Box 2. Influences on Payment Systems
Box 3. The Unwinding Procedure for a Multilateral Net Settlement System
Box 4. Continuous Linked Settlement Bank
Box 5. The CPSIPS and Central Bank Responsibilities
Box 6. Payment System Oversight and the IMF's Code on Transparency in Monetary and Financial Policies
Box 7. CPSIPS Self-Assessments