Lecture

Strategic Importance of Systemìcally Important Payment Systems (SIPS)

Abstract

The infrastructure necessary to produce the transfer of monetary value during a transaction is an important aspect of the financial system. The bank payment system consists of institutions, instruments, rules, procedures, standards, and technical means by which mutual obligations of the parties involved in a monetary exchange can be discharged.

An important subset is the Systemically Important Payment Systems (SIPS), designed to avert a domino effect whereby payment obligations of the failing bank are effected against the solvent banks. SIPS occupy a crucial role in the economy: not only do they determine the efficiency with which monetary transactions are used, but also the risk associated with their use. Thus their design, implementation and regulation are crucial for the development of financial markets and countries’ economies.

In this talk we will be focusing on the strategic impact of IT financial systems upon SIPS and the fundamental relationships with the Core Principles for Systemically Important Payment Systems in the framework of the European Union.

Bio

Tomáš Hládek spent almost 30 years at the Czech National Bank, where he acted in a number of managerial positions. As Executive Director of the Cash and Payment Systems Department, he was responsible for currency issue, protection and circulation; and for the policy, development and operation of different backbone systems. In his last two years at the CNB he acted as an advisor to the Governor of the Czech National Bank. In 2013 he moved to the Czech Banking Association where he acts as the Senior Executive Manager responsible for different IT projects.