The Riksbank oversees the financial market infrastructures to identify and limit the risks they may pose to financial stability^[5] The Riksbank’s oversight of the financial infrastructure . For this oversight work, the Riksbank applies the international CPMI-IOSCO Principles for Financial Market Infrastructures (PFMI), which provide guidance on how to maintain a safe and efficient financial infrastructure. In addition to the international principles, the Riksbank also takes into account the EU regulations for financial market infrastructures, such as central counterparties (EMIR^[6] Regulation (EU) No 648/2012 of the European Parliament and of the Council of 4 July 2012 on OTC derivatives, central counterparties and trade repositories. ) and central securities depositories (CSD Regulation^[7] Regulation (EU) No 909/2014 of the European Parliament and of the Council of 23 July 2014 on improving securities settlement in the European Union and on central securities depositories. ).

According to the PFMI's ninth principle, which explains how money should be settled in systemically important financial market infrastructures, companies should settle in central bank money, if "practical and available". This requirement is also included in EU regulations. What is considered "practical and available" is a subjective assessment that supervisory and oversight authorities need to make. In this assessment, they shall take into account, for instance, that it is not always possible for financial market infrastructures and their participants to access central bank money. We will come back to this in the section Obstacles to settlement in central bank money.

The reason why EU legislation and international principles advocate settlement in central bank money is that it eliminates credit risk for the participants in the settlement system.

If it is not considered practical and available for a financial market infrastructure to settle in central bank money, measures should be taken to manage and limit potential risks. In particular, it is important that participants in the system are made aware by the financial market infrastructure that the risk of settlement may increase when it is made in commercial bank money.