The Global Risks Alliance (GRA)
Every bank depends on payment systems, central counterparties, securities settlement systems, correspondent banks and messaging networks to move money and collateral. These financial market infrastructures concentrate risk by design: they make settlement safe for many participants, but a failure of the infrastructure, or of a large participant inside it, can spread fast. This page sets out how payment dependencies create risk, how they are overseen, and how instant payments and new digital services change the picture.
GRA · Established · service level R0
Payment systems risk is the risk that the payment systems, central counterparties, settlement systems, correspondent banks and messaging networks a bank depends on fail or demand liquidity at the worst time. These financial market infrastructures make settlement safe by concentrating risk, governed by the CPMI-IOSCO Principles for Financial Market Infrastructures.
How a failure at one financial centre can spread through settlement links. Design links, not real dependencies.
The working screen behind this subject: its structure, terms and states. Names are placeholders and values illustrative.
Payment dependencies · Mortgage book · Scenario: delayed transition
geocoded collateral · placeholder
| High | 1891 | 155 | 87 |
| Medium | 3705 | 376 | 60 |
| Low | 27,186 | 2266 | 54 |
Critical market infrastructure and digital services. The dossier below sets out how the risk develops, what is measured, where the data come from, how it is modelled and who decides.
Real-time gross settlement requires banks to fund each payment as it is made. If a large participant delays payments to conserve liquidity, others wait in turn, and gridlock can build within hours.
Clearing nets exposures and mutualises default losses. In stress, margin calls rise across members at the same time, and a member default draws on a default fund that all members share.
An outage at a payment system, a messaging provider or a large correspondent stops salaries, securities settlement and trade payments. Most participants have few alternatives available at short notice.
Instant payments, fintech intermediaries, stablecoins and cloud-hosted infrastructure create new dependencies and allow faster runs. Some of them sit outside the traditional perimeter of payment oversight.
Each term as this page uses it. Where a standard-setting body defines the term, the wording follows that body.
| Term | Definition |
|---|---|
| Financial market infrastructure | A system that clears, settles or records payments, securities or derivatives among participants. |
| Central counterparty | An entity that stands between buyers and sellers in cleared trades, guaranteeing performance. |
| Intraday liquidity | Funds a bank can access during the business day to make payments as they fall due. |
Each indicator carries its unit, its cadence, the kind of source behind it and the evidence label a value would carry. No values are shown: a programme supplies them under its own authority.
| Indicator | Unit | Cadence | Source type | Label |
|---|---|---|---|---|
| Value settled through large-value payment systems | currency units per day | daily | System operator statistics | OFFICIAL |
| Payment system availability | percent of operating hours | monthly | Operator disclosures | REPORTED |
| Peak intraday liquidity usage | share of available intraday liquidity | daily | Bank intraday liquidity monitoring | OBSERVED |
| Initial margin and default fund resources at central counterparties | currency units | quarterly | CPMI-IOSCO public quantitative disclosures | REPORTED |
| Settlement fails | value and count per period | monthly | Securities settlement system statistics | OFFICIAL |
| Active correspondent banking relationships | count of relationships | annual | CPMI analysis of payment messaging data | ESTIMATED |
| Instant payment adoption | instant transactions as share of credit transfers | annual | Central bank payment statistics | OFFICIAL |
The topic as a computational graph: named sources feed the methods, an evidence review gates the outputs, and the decisions stay with the authorities that hold them.
Fig. 02Nodes carry their type, two metric rows and a state; connectors show what feeds what; dashed frames name the owners; the timeline is the cadence. Design of the pipeline, not a record of a run.
Named public datasets and institutional records, each with its licence class. Sources by agreement are used only under their terms and never republished.
| Source | What it gives | Licence class |
|---|---|---|
| CPMI Red Book statistics | Payment, clearing and settlement statistics for CPMI jurisdictions | Free, BIS terms of use |
| Public quantitative disclosures of central counterparties under CPMI-IOSCO standards | Margin, default resources, stress testing and availability for each central counterparty | Public, operator terms |
| ECB TARGET Annual Report and payment statistics | Activity, availability and incidents in euro area payment and settlement systems | Free, attribution |
| Federal Reserve Financial Services volume and value statistics | Activity in Fedwire and FedACH services | Public domain |
| Bank of England RTGS and CHAPS statistics | Settlement volumes and values in UK payment systems | Free, Bank of England terms of use |
| FSB and CPMI reports on cross-border payments | Progress, frictions and dependencies in cross-border payment arrangements | Free, attribution |
Banking Nexus prepares evidence. The decisions below are taken by the authorities named, under their own rules, and never by the platform.
| Who decides | The question | Evidence this page serves |
|---|---|---|
| Central bank as overseer and operator | Which systems are systemically important and what standards and recovery plans they must meet | Availability, incident and participation data; concentration of flows |
| Bank treasury | How much intraday liquidity and collateral to hold, and which backup channels to maintain | Intraday usage profiles, dependency maps and outage scenarios |
| Central counterparty board and risk committee | How to calibrate margin and default resources against extreme but plausible conditions | Stress test coverage and back-testing of margin models |
| Resolution authority | How to preserve a failing bank's access to payment, clearing and settlement services | Continuity of access arrangements and operational dependencies |
Which payment and settlement systems, if disrupted, would stop economic activity.
How banks, payment providers, schemes and technology suppliers connect.
How quickly disruption spreads to households and firms, and what fallbacks exist.
The effect of instant payments, digital wallets and new settlement assets.
Payment systems are networks with central nodes. Large-value systems, clearing houses and card schemes concentrate flows, making them efficient and critical. Their failure would affect all participants at once.
Instant payments reduce settlement risk but increase operational and liquidity demands, because funds move around the clock and must be available immediately. Fraud can also move faster.
Correspondent banking links domestic systems internationally. Withdrawal of correspondent relationships can cut regions off from cross-border payments.
Technology concentration extends dependence beyond the payment operators themselves to the cloud, network and software providers they use.
Cash remains a fallback in many economies, but its declining use, and the closure of branches and cash machines that follows, can reduce resilience when digital systems fail, especially for older, rural and low-income people who rely on it most.
| Method or data | What it shows | Its limit |
|---|---|---|
| Payment flow data | Volumes and network structure | Confidential; aggregated for research |
| Dependency mapping | Links between participants and providers | Visibility beyond direct links is limited |
| Outage analysis | Causes and effects of past disruptions | Few severe events to learn from |
| Scenario exercises | Fallback effectiveness | Exercises simplify real disruption |
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