Globalised world requires harmonisation of the payment and securities market

News, Riksbank studies In a constantly changing world, small markets like Sweden should not be left outside the larger markets. Sweden must therefore continue to harmonise with European standards allowing Swedish companies and consumers to a greater extent benefit from the EU’s internal market. A new Riksbank Study describes what has been done so far in the public and private sector in Sweden and Europe to harmonise processes, requirements and message formats. The study also discusses platform sharing with other central banks and what considerations may be needed prior to such a decision.

In light of an increasingly globalised and digitalised world, extensive structural change is taking place in the areas of payments and securities. Technological developments enable and create expectations of faster and more efficient payments and securities transactions. All this is taking place in a context where financial institutions are already largely moving from national to international infrastructure solutions.

Harmonisation involves, among other things, a common framework for all EU Member States as well as standardised processes and formats for messages sent between financial agents in connection with, for example, a payment transaction. Harmonisation brings increased efficiency and competition, and facilitates the movement of capital across borders as the need for adaptations decreases. For companies, it may mean simpler procedures and processes for cross-border transactions.

The Riksbank Study points out the importance for all parties in the Swedish financial system, including the Riksbank, to contribute actively to driving this harmonisation and integration forward.

Platform sharing with other central banks

The Riksbank Study also discusses platform sharing with other central banks and what considerations may be needed prior to such a decision. Platform sharing can effectively contribute to free movement of capital, facilitate competition and lower barriers for cross-border payments and securities transactions, considerations regarding influence and continuity may, however, need to be made.

In 2021 the Riksbank will decide on which direction the Riksbank advocates for its future payment settlement system, and how the Riksbank shall provide central bank money for securities settlement going forward.

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Updated 21/05/2021