Payment system risks in Finland and the need for regulation and supervision
Leinonen, Harry; Saarinen, Veikko (03.03.1998)
JulkaisusarjaSuomen Pankki. Yleistajuiset selvitykset. A
Bank of Finland
Julkaisun pysyvä osoite onhttps://urn.fi/URN:NBN:fi:bof-201807251717
Regulation and control of payment system risks can be justified by the fact that, since payment Systems are an integral part of the financial sector infrastructure, disturbances therein can spread widely through the society.The payment system risks that need to be controlled are classified here in the following basic categories: credit risks; liquidity risks; environment risks; clearing and settlement risks; and operating risks.Payment systems subject to supervision are categorized by the payment media used, so that the risk profiles within in each category are as uniform as possible.The report also discussed means of reducing payment system risks. The report scrutinizes in particular the risks inherent in Finnish payment and settlement systems.In Finland overall payment system regulations and norms are based on legislation governing credit institutions, the Bank of Finland and the Financial Supervision Authority as well as on self-regulation.The Bank and the Financial Supervision Authority are jointly responsible for the supervision of Finnish payment systems.The Bank is responsible for controlling systemic risk and for overseeing payment systems as a whole, and the Financial Supervision Authority supervises and monitors individual credit institutions in respect of payment system risks. Because risks are constantly changing, regulation and supervision of payment systems need to be continually updated.As the new operating environment including the European Central Bank and the ESCB unfolds, new features will mark the supervision of payment systems and in general we will see more intense international cooperation in the area of payment systems.