Swiss Interbank Clearing, for example, has admitted participants from abroad since the late 1990s. Second, the consolidation of infrastructures is in full swing, especially in Europe. In some cases, consolidation takes place through mergers between formerly independent systems. For example, Euroclear group integrated the formerly independent central securities depositories of the Netherlands, Belgium, France and the UK. In other instances, consolidation takes a less direct form. National infrastructures may, for example, set up mutual links to facilitate trade, i.e. the settlement of cross-border transactions. The internationalisation of stock markets has also made it possible to trade an increasing number of stocks on several different trading platforms. And finally, we have also witnessed the emergence of a few completely new infrastructures which have adopted an international – and in some cases even global – focus from the outset. A classic example is the Continuous Linked Settlement (CLS) system, which was designed for the settlement of foreign exchange transactions and started operations just over four years ago. It now settles transactions in as many as 15 currencies. But how has the opening up of trading centres and settlement channels, which traditionally had a domestic focus, impacted on financial stability? On the one hand, it is obvious that the adjustment of the financial market infrastructures to the special features of global financial markets may contribute to reducing risks related to the settlement of cross-border transactions. For example, the risk associated with traditional foreign exchange transaction settlements (Herstatt risk) can be largely eliminated through CLS.

Niklaus Blattner: Global trends in financial market infrastructures and their significance for financial stability Introductory remarks by Mr Niklaus Blattner, Vice-Chairman of the Governing Board of the Swiss National Bank, at the end-of-year media news conference, Zurich, 14 December 2006. *  *  *  Developments at banks and financial markets are subject to extensive daily media analysis and commentary. By contrast, financial market infrastructures, i.e. stock exchanges, payment and securities settlement systems, only rarely make the headlines. I have decided to shift the focus today and concentrate on financial market infrastructures. In particular, I wish to highlight some interesting global trends and assess how these trends impact on the stability of the financial system. Internationalisation of financial market infrastructures Traditionally, most financial market infrastructures have a strong national focus. This made sense as long as the financial markets also had a strong domestic focus. However, the deregulation and liberalisation of financial markets and the associated increase in cross-border financial flows resulted in a widening gap between financial markets and financial market infrastructures, with the latter remaining constrained within national bounds. More internationalisation of financial market infrastructures became inevitable in order to avoid a loss of competitiveness due to inefficiencies. This process of opening up market infrastructures still continues today. We can differentiate between different types of internationalisation. First, direct access to infrastructures that used to be reserved exclusively to domestic participants is now being granted more frequently to foreign participants as well.