Oversight of the financial infrastructure
The Riksbank oversees the central participants in the financial infrastructure. The aim is to identify and analyse the sources of risks and efficiency losses and, where necessary, elicit change.
The Riksbank's oversight
In its oversight, the Riksbank applies CPMI-IOSCO's international principles for a safe and efficient financial infrastructure. For certain types of financial infrastructure systems, many of the international principles have also been incorporated into law. These systems are subject to continuous oversight partly via internal cooperation arrangements in which the Riksbank participates. But the Riksbank also ensures that the systems also comply with those international principles that are covered by the law.
Criteria for which financial market infrastructures are to be included in the oversight
The Riksbank oversees the financial infrastructure systems that it has deemed to be important for financial stability. The Riksbank applies six criteria to identify the financial infrastructure systems that are to be overseen:
- number and value of the transactions handled by the system
- the system's market shares
- the markets on which the system operates
- the available alternative systems that can be used at short notice
- links with other systems and other financial institutions
- the system's significance for the implementation of monetary policy
Not all the criteria need to be fulfilled for the Riksbank to decide to oversee a system. We also consider how the system may develop in the future. Once the Riksbank has taken a decision to oversee a new system, the decision is made public.
What does being subject to oversight involve?
Once the Riksbank has decided to subject a financial infrastructure system to oversight, the Riksbank expects the system to comply with CPMI-IOSCO's international principles. Compliance with the principles involves, for example, publishing information in accordance with CPMI-IOSCO's Disclosure Framework, at least once every two years, or more often is the system has undergone major changes.
The principles are minimum requirements, however. The specific characteristics of the Swedish market may require the Riksbank to impose additional requirements. When the Riksbank adjusts the requirements to Swedish conditions, this is justified in the analysis and in the assessment of the individual systems. Being subject to oversight also involves regular and ad hoc reporting to the Riksbank and regular meetings.
The Riksbank decided in 2012 to apply these principles in its oversight work. This decision was updated in 2018.
Risk-based working method
The Riksbank prioritises the analysis of risks in and between the financial infrastructure systems that are subject to oversight. For each infrastructure system, the risks are assessed using a template based on the international principles. These system-specific assessments then form the basis of an assessment of all the risks based on how seriously they may affect financial stability in Sweden. In this assessment, the Riksbank may also find that a more in-depth analysis is necessary to ensure compliance with a particular part of the international principles. Finally, the risk assessment is incorporated into a plan for oversight activities which specifies which risks are to be analysed in more depth and managed in the short term.
Cooperation with Finansinspektionen
Finansinspektionen also has a responsibility for financial stability through its supervision of the individual companies in the financial infrastructure. The areas of responsibility of the Riksbank and Finansinspektionen sometimes overlap. In these cases, the aim is to have efficient forms of contact and cooperation. Formalised cooperation exists between the authorities to achieve this.
Cooperation in the oversight of foreign systems
The oversight of foreign systems acting in the Swedish infrastructure and that may affect financial stability in Sweden is led by the responsible authorities in each system's country of domicile and complies with the guidelines for cooperation according to international principles. The Riksbank participates in tcooperation.