East Caribbean Central Bank: Improving Payment Systems
Robust payment systems are a key requirement in maintaining and promoting financial stability. Over the past few years, a broad international consensus has developed on the need to strengthen payment systems by promoting internationally accepted standards and practices for their design and operations. In emerging markets, core principles for systemically important payment systems (CPSIPS) are likely to be of particular relevance, because of the efforts made by these countries to improve systems or to build new ones in order to handle better the growing payment flows from national and international financial markets.
Before an FSAP, due to start later in 2003, the East Caribbean Central Bank (ECCB) needed assistance with the assessment of its payment, clearing and settlement systems. The primary system to be assessed was the payment system for large transactions, where a real time gross settlements (RTGS) system was proposed. In addition, the retail payment system, mainly for smaller transactions, and the securities settlement systems for government securities and equities needed to be assessed. There was also a need to clearly define ECCB’s role in payment system oversight and to improve its internal governance structure in line with the best practice.
The IMF, on behalf of ECCB, approached FIRST for TA in April 2003 to enable all of the above.
The purpose of the project was to support the implementation of the legal, regulatory and governance reform of systemically important payment systems. Three project outputs were fully achieved, namely:
The Uniform Payment Systems Act developed as part of this project, filled gaps where the previous legal framework was deficient or ambiguous. The new Act:
The reports shared here are selected based on their potential relevance to other countries' financial sector development context.