BofE's Paper Addresses Oversight of Payment Systems
The Bank of England (BofE) has published a paper explaining how it intends to fulfil its payment systems oversight responsibilities under Part 5 of the Banking Act 2009. The paper sets out a brief overview of the relevant provisions of the Act and describes the planned operation of the bank’s oversight of recognised payment systems in practice.
A key aspect of the paper is a consultation on draft Principles for recognised payment systems. Under section 188 of the Act, the bank can, subject to the approval of HM Treasury, publish principles to which operators of recognised payment systems must have regard. The bank is proposing a set of 14 draft principles, which incorporate the 10 internationally agreed core principles for systemically-important payment systems, and include four new principles that supplement the core principles and address issues that are particularly important for the UK’s financial system.
Responses to the consultation are invited by 30 October 2009. A final set of principles will be published, subject to the outcome of the consultation and the approval of HM Treasury, once section 188 comes into force. This is expected to be later this year.
The paper also covers the bank’s framework for assessing risks to payment systems; the day-to-day processes it will follow; its relationship with other UK bodies with interests in payment systems; the exercise of its new powers; and its wider role in relation to payment systems.