Summary

The traditional payments and securities markets are undergoing a structural transformation, driven by, among other things, increased competition through new technologies and new actors, as well as new legislation. As part of the structural transformation, current actors in the financial sector see an opportunity to improve efficiency and optimise costs. They are therefore reviewing their services offerings and exploring new innovative solutions to streamline transaction flows, especially across borders.

In times of change, it is important that the actors in the financial sector work to provide safe systems for the settlement of money and securities. One way to reduce settlement risk is to settle in central bank money. As a central bank cannot go bankrupt, this removes the credit risk for participants in a settlement system provided by a central bank.

However, it is not always possible to settle in central bank money, and in these cases so-called commercial bank money is instead used for settlement. Settlement in commercial bank money takes place in a commercial institution, such as a bank, which means that participants in the system may have a credit risk with regard to that institution.

When major changes occur in the traditional payments and securities markets, the Riksbank monitors and analyses how financial market infrastructures^[1] Financial market infrastructures include payment systems, central securities depositories and central counterparties. and other actors work to offer safe systems for the settlement of money and securities, and how central bank money can be used to minimise risks.

Published: 20 February 2024