Analytical Framework In Assessing Systemic Financial Market Infrastructure: Interdependence Of Financial Market Infrastructure And The Need For A Broader Risk Perspective

Financial Market Infrastructures (FMIs) play a critical role in the financial system and the broader economy by facilitating the clearing, settlement and recording of monetary and other financial transactions and thereby maintaining and promoting financial stability and economic growth. However, the trends of financial sector development and interdependence of FMIs affect the assessment and management of payment and settlement risk for FMIs. It is thus important to know the status of FMIs in member economies as well as the trend and observations of their interdependence. Accordingly, the objectives of the study are to: (i) highlight trend of interdependence between FMI by initiating development of a simplified framework (both analytical and operational); (ii) provide observations on the situation of payment transaction related information from economies of the nine SEACEN participating member central banks and monetary authorities; and (iii) propose recommendations in this regard.