Payments and market infrastructure
Payment systems, central counterparties, central securities depositories and settlement networks sit at the centre of the financial system. They concentrate activity by design, which makes them efficient and also makes their continuity critical. The Global Risks Alliance (GRA) examines how real-economy and operational shocks reach clearing, settlement and liquidity, and where concentration turns a local failure into a system-wide one. It operates no payment or settlement service and moves no money. See Financial-system risk.
- 01InstitutionThe Global Risks Alliance (GRA)
- 02Service levelR0: information and enquiries
- 03In briefThe short answer
- 04TransmissionHow shocks reach market infrastructure
- 05StandardsThe principles market infrastructure runs on
- 06Network methodSettlement as a network with physical nodes
- 07QuestionsShared questions GRA works on
GRA · Institution · service level R0
The short answer.
Payments and market infrastructure are the payment systems, central counterparties, central securities depositories and settlement networks at the centre of the financial system, efficient because they concentrate activity and critical for the same reason. GRA examines how real-economy and operational shocks reach clearing, settlement and liquidity; it operates nothing.
Settlement dependencies, and what fails with a node.
How a failure at one financial centre can spread through settlement links. Design links, not real dependencies.
How shocks reach market infrastructure.
| Channel | How the shock reaches finance |
|---|---|
| Operational outage | A failure at an infrastructure or its provider halts payments or settlement for many participants |
| Liquidity | Margin calls and settlement delays create sudden liquidity needs across participants |
| Concentration | Activity concentrated in few infrastructures and providers magnifies any single failure |
| Cross-border dependency | Infrastructures in one jurisdiction depend on networks and providers in others |
| Physical hazards | Power, communications and site hazards threaten continuity |
Channels describe mechanisms, not measured strengths or probabilities.
The principles market infrastructure runs on.
| Instrument | Body | Focus |
|---|---|---|
| Principles for Financial Market Infrastructures (2012) | CPMI-IOSCO | Credit, liquidity, settlement, operational and general business risk for payment systems, CSDs, SSSs, CCPs and trade repositories |
| Guidance on cyber resilience for FMIs (2016) | CPMI-IOSCO | Governance, protection, detection, response and recovery of critical operations |
| Central counterparty resolution guidance | FSB | Resolution planning and loss allocation for systemically important CCPs |
| G20 cross-border payments roadmap | FSB and CPMI | Targets for cost, speed, access and transparency of cross-border payments |
Settlement as a network with physical nodes.
Market infrastructure is analysed as a network: participants as nodes, settlement and clearing obligations as edges. Concentration measures show which nodes carry the most flows; failure simulation removes a node and traces unsettled obligations and liquidity needs. GRA adds physical geography to the graph. Primary and backup sites, power and telecom dependencies and their hazard exposure become node attributes, so a flood or grid event can be read as a network event.
Network science methods are described at GCRI network science; specialist work continues at Payments and Market Infrastructure.
Shared questions GRA works on.
- 01
Common dependencies
Which power, network and cloud dependencies do infrastructures and their participants share?
- 02
Liquidity under compound shocks
How would a combined operational and market shock change liquidity needs, described with bounded assumptions?
- 03
Recovery realism
Do recovery arrangements assume providers and sites that would fail in the same event?
- 04
Public services
Which public payments depend on the same infrastructure, and what happens when it stops?
Analysis, never operation.
- GRA operates no payment, clearing or settlement service and holds or moves no money for anyone.
- It does not oversee, assess or certify any infrastructure; oversight remains with competent authorities.
- No participant's confidential operational information is exchanged with another.
- Related: Cyber and operational and Systemic stability.
The same subject across the Consortium.
Payments and Market Infrastructure
The specialist community, in development: Payments and Market Infrastructure.
Critical infrastructure
Evidence from The Global Centre for Risk and Innovation (GCRI): Critical Infrastructure.
Terms used on this page.
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. |
| Settlement finality | The point at which a transfer becomes irrevocable and unconditional in law. |
| Principles for financial market infrastructures | The CPMI-IOSCO international standards for payment systems, central securities depositories, securities settlement systems, central counterparties and trade repositories. |
Where this page's references lead.
The bodies and documents this page is read against. Status and editions change; each link goes to the issuing body.
Questions and answers.
Does GRA run a payment or settlement platform?
Who uses this analysis?
Why does concentration matter?
How does this connect to physical risk?
Around GRA.
Start with an enquiry.
The current service level is R0: information and enquiries. An enquiry receives a reference and names the next step; applications, payments, compute allocations and registrations open only when their team, terms and review capacity exist.