The fewer alternatives available, the more serious the liquidity bottlenecks and counterparty risks. An additional aspect relates to the network. It comes into play when a system is the connecting link between other systems, such as in the case of the central counterparty SIS x-clear, which links the trading platform virt-x and the securities settlement system SECOM. The failure of such a connecting link can significantly affect operations at the upstream and downstream systems, even if the link itself is only of minor direct relevance to the market participants. Our analyses led to the conclusion that the following systems should be classified as systemically important: the interbank payment system Swiss Interbank Clearing (SIC), the securities settlement system SECOM, the central counterparty SIS x-clear and the multi-currency payment system Continuous Linked Settlement (CLS). PostFinance is not classed as systemically important. This may be surprising given the economic significance of postal payment transactions, but it is a direct result of the existence of alternatives, ie bank payment transactions, which are instantly available should the postal payment system experience any serious problems. Of the systemically important systems, CLS has been exempted from the minimum requirements as it is already adequately overseen by the Federal Reserve Bank of New York and because the exchange of information between the New York Fed and the National Bank runs smoothly. By strictly avoiding duplications, we can reduce the burden of oversight, ie the density of regulation, also in the case of SECOM and SIS x-clear.

The operators of these systems are supervised as banks by the Swiss Federal Banking Commission (SFBC). Cooperation between the SFBC and the SNB is facilitated as the provisions in the Banking Act and the requirements stipulated by the National Bank Ordinance are partly similar, and both authorities wish to minimise the regulatory burden. This is also in the interest of the systems that are subject to oversight. I should add that not only the SFBC, but all of the evaluated systems have the opportunity to comment on our classification. The classification will be finalised at the beginning of next year. Basel II: a never-ending story? The National Bank is involved in the implementation of the recommendations on the international convergence of capital measurement and capital standards, known as Basel II. The National Bank does not only provide a member to serve on the Basel Committee on Banking Supervision. As an authority committed to system stability, it also shares the responsibility of adequately implementing the Committee’s recommendations. The SFBC’s fundamental hypotheses are undisputed, namely that the current provisions are in need of reform and that the recommendations of the Basel Committee are to be implemented with  1/2  moderation, while at the same time any dilution of the capital adequacy requirements aimed at reducing the insolvency risks has to be avoided. We are confident that the parties directly involved, ie the SFBC and the banks, will again succeed in agreeing, within the given time frame, on pragmatic and acceptable solutions.