A new configuration of players in the financial system has led to a blurring of distinctions between different types of intermediaries, to greater consolidation, and to a rapid growth of new financial players and services. Payment, clearing and settlement systems naturally evolve in response to such financial market developments. As the number of new financial products is growing and existing markets are rapidly expanding, the infrastructure needs to be in the position to handle such developments. A good example is the evolution of clearing and settlement arrangements for OTC derivatives. It took a while for the infrastructure to adjust to the tremendous growth in OTC derivatives. Eventually, with support from central banks, the most pressing shortcomings began being addressed. Today, there is a far higher degree of automation, new technical processes have been introduced, and innovative services are available. The infrastructure for the OTC derivatives markets will undoubtedly continue to evolve. Whatever path the evolution takes, as the market infrastructure moves further in the direction of centralised processing of trades and posttrade events, several issues will assume greater importance. First, providers of essential post-trade services for OTC derivatives should provide open access to their services and should aim to achieve convenient and efficient connectivity with other systems. Moreover, central banks and supervisors will need to consider whether certain existing standards for securities settlement systems, central counterparties or systemically important payment systems should be applied to providers of clearing and settlement services for OTC derivatives.

The knock-on effects of distress at one of the current large global players would presumably be much bigger. Conclusions Let me briefly conclude, ladies and gentlemen. Central banking and payment systems are inextricably linked. Central banks all around the world are involved in payment systems and market infrastructures in many different ways owing to their roles and responsibilities in  BIS Review 130/2007  5  relation to monetary policy and financial stability. Indeed, payment systems disruptions would not only affect financial stability, but may potentially also have an impact on monetary policy implementation. Central banks have found ways of safeguarding price stability, while at the same time ensuring the smooth functioning of the payment system, by drawing a clear line between providing intraday liquidity for payment system purposes and providing credit for monetary policy implementation. Moreover, the sufficient availability of collateral is important today as a contribution of central banks to financial stability. The roles of central banks in the field of payment systems are changing in a number of ways as a result of progressing globalisation, increasing complexity, and the emergence of new players and services: •  The approach of central banks to analysing financial stability is changing. A comprehensive view of the key sources of risk and vulnerabilities facing the payment systems and market infrastructures cannot be formed without taking due account of developments at the global level, such as the emergence of cross-border payment systems and offshore centres.