1 / 22

Regional Experience on Clearing and Settlement Systems

Regional Experience on Clearing and Settlement Systems. Johannesburg 19 June 2003 Alice Zanza Reserve Bank of Zimbabwe. Relevance of clearing and settlements. Trading has to be settled Barter Cash Electronic payments Investor confidence in the payment system Financial stability

finley
Download Presentation

Regional Experience on Clearing and Settlement Systems

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Regional Experience on Clearing and Settlement Systems Johannesburg 19 June 2003 Alice Zanza Reserve Bank of Zimbabwe

  2. Relevance of clearing and settlements • Trading has to be settled • Barter • Cash • Electronic payments • Investor confidence in the payment system • Financial stability • Systemic risk

  3. Systemic Risk • “The risk that the failure of one participant, in financial markets generally, will cause other participants to be unable to meet their obligations” • Effects: • Significant liquidity problems • Threat not only to whole financial sector but economy as a whole • Nightmares for the Central bank

  4. Components of Payment System • Banks • Financial Institutions • Government • Rules and Regulations • Processes and Procedures • Legal Framework • Infrastructure • Transactions ( Payment and Settlement) • End users/ Customers • Service Providers • Other Stakeholders

  5. Building Safe and Efficient Payment System • Combined action by central bank and banking industry • Shared vision • Cooperation from other stakeholders • Clear cut division between Competition and Cooperation • Technical efficiency • Compatibility with monetary policy • Access criteria • Compatibility with payment systems from other countries

  6. Building Safe and Efficient Payment System • Driver • Support from the top • ‘Troublemaker’ • Long term approach • Avoid quick fix • Commitment, commitment and commitment • Continuity

  7. Goal Definition • Gross Settlement • One to one • High value payments • High liquidity requirements • Low risk • Credit push • Net settlement • Lower liquidity requirements • Higher risk • Legal basis • High and low value payments • Clearing Cycles • Settlement Time • End of day • Deferred

  8. Goal Definition • Finality and Irrevocability • Delivery versus Payment (DVP) • -Securities market • -How are you going to achieve this • -Various models • G30 Recommendations for SSS • BIS Report: Recommendations for SSS( RSSS) • CPSS + IOSCO- Nov 2001 • “Assessment methodology for “RSSS”- Nov 2002 • Central Securities Depository • Government securities vs Equities • Immobilisation / Dematerialisation

  9. MEFMI (10 ) Angola Botswana Lesotho Malawi Namibia Swaziland Tanzania Uganda Zambia Zimbabwe SADC (14) Angola Botswana Lesotho Malawi Namibia Swaziland Tanzania Zambia Zimbabwe DRC Seychelles South Africa Mauritius Mozambique Regional Trends

  10. SADC REGION

  11. SADC Developments • 9 million SQ Km • Estimated population of 190 million • Diverse capabilities • Dominant use of cash • Wide use of cheque • Credit transfers and direct debits • Payment cards • Developing electronic payments

  12. SADC Payment Systems Project • Launched July 1996 Funded by World Bank • South Africa • 1993 NPS reform discussions • 1995 Strategic Framework published • 1996-1998 Development of SAMOS • Mauritius • 1991 to 1992 embarked on phased programme of monetary policy reforms • 1993 NPS reform discussions • Zimbabwe • 1995 NPS reform discussions • Preceded by economic reform programme

  13. SADC Payment Systems Project • Phase One • Creation of awareness • Building of common language • Understanding current situation as foundation for vision and strategy setting • BIS Publication ( Green Book 1996) • Phase Two • SADC future payment systems • Shared vision + documented strategy (1999)

  14. SADC Payment Systems Project • Publications • Green Book • Vulindhlela ( SADC Newsletter) • Strategy documents • Guide to Developing Payment Systems Reform • Requirements for SADC suitable RTGS system • Internet Connectivity • Interactive website • Capacity building • MEFMI, World Bank, IMF, BIS • Payment systems agenda item • Improved payment systems environment • Risk awareness

  15. SADC RTGS Systems • Implemented • South Africa 9 March 1998 (92% gross settlement) • Mauritius December 2000 (66%) • Malawi 19 March 2002 (72%) • Namibia 10 June 2002 ( not available) • Zimbabwe 18 November 2002 (26%) • In progress • Tanzania • Selection process • 5 countries

  16. Challenges • Infrastructural constraints • Telecomms and Electricity • Resources • Legal issues • Standards • Country specific policies • Management of change • Buy in • Reform of securities settlement systems • Resilience • Scope of Oversight • how far do you go?

  17. Question • Should we continue to strive for regional initiatives given disparities? • YES based on a number of considerations incl: • Realised benefits • Benefits of synergy • Global trends cannot be ignored • Search for financial stability • SADC subscribes to various initiatives • E.g. Core principles for SIPS • Recommendations for SSS • FSAP

  18. Quote • “Payment and settlement systems are to economic activity what roads are to traffic:necessary but typically taken for granted, unless they cause an accident or unless bottlenecks develop” • BIS : Annual Report 1994

  19. Quote • “Its no good stopping the fraud in your own backyard, only for it to migrate to the country next door” • Bert Morris- National Westminster Bank

  20. CONCLUSION • World never stands still. This is true of payments and their clearing processes • Financial sector developments, expansion in cross border capital flows as well as growth in foreign exchange transactions and securities trading are here to stay. • While we tackle the challenges posed by these developments, we must not lose the opportunities for innovation, investment as well as doing things better • Payment systems reform is a cooperative affair,without cooperation there would be no payment systems……..etc

  21. THANK YOU

  22. RISK

More Related