Many supervisory and oversight authorities still pursue an institution-based approach. In other words, they apply different criteria to the same functions, depending on whether these functions are exercised by a bank, on the one hand, or by a stock exchange or central securities depository, on the other. Furthermore, banks and financial market infrastructures are mostly supervised or overseen by different authorities. The same applies to Switzerland. This brings with it the risk that regulatory differences are deliberately exploited. The question of whether financial market regulation needs to focus more on the function rather than on the institution so as to limit regulatory arbitrage would have to be examined. Regulation would then not be based on the legal status of an institution but on the functions actually exercised. 2  BIS Review 123/2006  Conclusion The picture I have given you of developments in the field of financial market infrastructures is by no means complete. Other developments that should be mentioned are the tendency nowadays to attach greater significance to measures relating to contingency planning and crisis management, or the growing movement towards organising financial market infrastructures as profit-oriented public companies observed in many countries. In Europe, in particular, there is pressure to consolidate the strongly fragmented infrastructure environment. This dynamic development challenges the operators of financial market infrastructures in particular. The decision-makers at the Swiss financial market infrastructures – SWX Swiss Exchange, SIS group and Telekurs group – also have to decide how they want to position themselves strategically.

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.