Spatial financeWhere capital meets hazard, exposure and transition
Market infrastructure technology
Payment and financial market technology covers the trading platforms, central counterparties, depositories and paymentpergalanthrough which capital markets operate. Analysis focuses on settlement risk, liquidity needs, operational resilience and the dependencies that let a technical failure become a market event.
What payment and financial market technology does here.
Payment and financial market technology covers thepergalanthat clear and settle transactions and support trading. Their continuity is essential for economic activity and crisis response. In capital markets and investment and financial stability, payments analysis shows how operational outages or cyber events canfreezeliquidity across the economy. It informs resilience standards and contingency arrangements. The canonical description is onthe STEM Commons.
Settlement cycle analysis
Changes to settlement cycles are analysed for their effects on counterparty exposure, margin, funding needs and the time available to match, allocate and correct trades.
Liquidity simulation for infrastructures
Payment and settlement flows are simulated under participant defaults or outages to estimate liquidity needs and the queues that would form.
Operational resilience review
Recovery timeobjectives, failover arrangements and third-party dependencies of infrastructures are reviewed against scenarios of cyber incidents and provider failures.
03Stress test
How a shock to assets becomes a system loss.
The equity the system loses after interbank contagion, against the initial hit, as leverage, interconnection and recovery rates change, the core of a macroprudentialTesta zextê. Teaching model with stated illustrative values, not a prediction.
Kontrol
Fall in external assets
2.0%
Leverage (assets over equity)
10 times
Interbank share of assets
10%
Recovery on interbank claims
40%
Banks in the system
20
Core banks
20% of banks
Xwendin
Equity lost to the initial shock
18.0%
Equity lost after contagion
45.0%
Added by contagion (DebtRank)
27.0 points
Banks in default
0
Jimar, rêbaz û çavkanî
Round
System equity lost (%)
Banks in default
0
18.00
0
1
28.80
0
2
35.28
0
3
39.17
0
4
41.50
0
5
42.90
0
6
43.74
0
7
44.24
0
8
44.55
0
9
44.73
0
10
44.84
0
11
44.90
0
12
44.94
0
13
44.96
0
14
44.98
0
15
44.99
0
16
44.99
0
17
45.00
0
18
45.00
0
19
45.00
0
20
45.00
0
21
45.00
0
22
45.00
0
23
45.00
0
24
45.00
0
25
45.00
0
26
45.00
0
27
45.00
0
28
45.00
0
29
45.00
0
30
45.00
0
Rêbaz
DebtRankBattiston and others (2012), Scientific Reports 2:541
Differential DebtRankBardoscia and others (2015), PLOS ONE 10
Contagion in financial networksGai and Kapadia (2010), Proc. R. Soc. A 466
Clearing in financial networksEisenberg and Noe (2001), Management Science 47
Pankeya nediyarîyê (Monte Carlo ya parametreyan) Spiegelhalter, Pearson and Short (2011), Visualising uncertainty about the future, Science 333
Hesasiyeta yek-yek (tornado) Saltelli and others (2008), Global Sensitivity Analysis: The Primer, Wiley
Dane
No observed data enters this model: it runs on the teaching values set by the controls, to be replaced with a programme’s own evidence.
How a shock to assets becomes a system loss. Illustrative teaching model: it runs on the values set by the controls, not on measured data. Methods: DebtRank (Battiston and others (2012), Scientific Reports 2:541); Differential DebtRank (Bardoscia and others (2015), PLOS ONE 10); Contagion in financial networks (Gai and Kapadia (2010), Proc. R. Soc. A 466).
Li seranserê şeş stûnan, bi pêşengiya Nexus Consortium
Datasets and records used by payment and financial market technology on this platform, with the role each plays and the label its values carry. Sources are listed inthe source register.
Dane
Rol
Nîşan
CPMI payment and FMI statistics
System values and volumes
Statîstîkên weşandî
CCP public quantitative disclosures
Liquidity resources and margin flows
REPORTED
Settlement fails reports
Settlement efficiency
Statîstîkên weşandî
Infrastructure incident disclosures
Operational failure analysis
REPORTED
05Exposure, loss and capital
What market infrastructure technology means for exposure, loss and capital.
The exposure, loss, scenario and capital views a risk officer, supervisor or ministry of finance would ask for, with the frameworks they report against. Structures follow supervisory and actuarial practice. Values are illustrative: never prices, ratings or advice.
Capital, solvency and fiscal indicators
The indicators a risk officer, supervisor or ministry of finance reads first on market infrastructure technology.
Indicator
Unit
Who reads it
Framework
CET1 ratio
% of risk-weighted assets
Banks, supervisors
Basel framework
Liquidity coverage ratio
% of stressed outflows
Banks, central banks
Basel framework
Solvency ratio
% of solvency capital requirement
Insurers, supervisors
IAIS Insurance Core Principles
Combined ratio
% of earned premium
Insurers
Actuarial practice
Protection gap
uninsured share of economic loss
Insurers, ministries of finance
Published loss statistics
Public debt
% of GDP
Ministries of finance, IMF
Debt Sustainability Framework
Gross financing needs
% of GDP per year
Ministries of finance, investors
Debt Sustainability Framework
Source: the frameworks named in each row. Indicator names, units and frameworks only; values belong to each institution’s own reporting and are never shown here.
NGFS climate scenarios · Network for Greening the Financial SystemIFRS S2 Climate-related Disclosures · ISSBTCFD recommendations · Financial Stability Board TCFDPrinciples for the effective management of climate-related financial risks · Basel Committee on Banking Supervision
06Erêkirin
How results are checked.
Pergalare tested through failover exercises, liquidity simulations and supervisory oversight. Reconciliation checks the integrity of settled positions.
Kontrol bikin
How it is done
Reconciliation
Simulated flows are reconciled with reported settlement totals before any scenario is run
Scenario review against the PFMI
Scenarios are checked against the extreme but plausible conditions the PFMI require
Behavioural sensitivity
Results are tested for changes in participant behaviour such as delayed payments or hoarding of liquidity
Interdependence among participants and third-party providers can produce unexpected failures. Simulations may not capture behavioural responses under stress.
What are the limits of payment and financial market technology in this field?
Interdependence among participants and third-party providers can produce unexpected failures. Simulations may not capture behavioural responses under stress.
How are results checked?
Systems are tested through failover exercises, liquidity simulations and supervisory oversight. Reconciliation checks the integrity of settled positions.
Are the values on this page real?
The data names, roles and checks are real descriptions of practice. The canvas shows a design of the method’s use, not a run; no result is reported here.
rêzeya Pergalên Stratejîkis the Consortium’s quarterly publication. What you know about this subject can become evidence, a case or a correction in the next edition, credited to you and published under CC BY 4.0 where it is your own work.
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