Systemic risk
Systemic risk is the risk that the failure of one participant in a payments system will imperil other system participants (a 'domino' effect). For example, a bank might go bankrupt, causing it to become unable to meet its obligations towards other members of the payments system in which it participates. The risk is that other participants would get into similar trouble and might even go bankrupt.
Oversight focuses on three categories of financial transactions:
- Interbank large-value payments. Among these systems, TARGET2, EURO1 and CLS (and SWIFT as a message service provider) are the most relevant for the clearing and settlement of Dutch interbank large-value payments.
- Securities clearing and settlement. In this realm, central counterparties such as LCH.Clearnet SA and EMCF play a role in clearing securities and derivatives; Euroclear acts as the central security depository and DNB settles the money side of securities trading.
- Retail payments. This comprises of collective retail products such as PIN, Chipknip, Acceptgiro, Incasso, iDeal and the international brands MasterCard and VISA. Equens’s systems for clearing and settlement (Clearing and Settlement System, CSS and Clearing and Settlement Mechanism, CSM) are used for the transfer of the retail payments and the Equens Switch is used for authorising card payments.
Transparency
DNB has a commitment of being transparent regarding the results of the oversight on payment and securities settlement systems. From 2006 onwards, DNB has to this end published an annual overview of the compliance to oversight standards of overseen systems. Until 2009, this overview was part of DNB’s annual report. From 2010 on, its form is a seperate oversight report. Downloads are available at the bottom of this page.
Standards
DNB oversight applies (inter)national standards to its overseen entities. The document ‘Oversight of payment and settlement systems’ contains an overview of overseen systems and the standards that apply to specific oversight objects. All current sets of standards are available as downloads at the bottom of this page.
