This challenge is at the heart of the current discussions on the “proposal for a directive on payment services in the internal market”. 1.3. Ensuring business continuity  The third key issue I see is related to business continuity. Business continuity can be defined as a set of measures aimed at ensuring the continuity of service in various incident scenarios such as the failure of an infrastructure component, or the unavailability of the staff in charge of operating systems. Business continuity has progressively emerged as a key issue to be considered for the design of payment infrastructures. In addition, several factors have recently led to overhaul our approach of  2  BIS Review 53/2006  operational risk: the spreading of real-time processing within payment systems, the growing complexity of technologies, the increasing interdependence between payment systems and the materialisation of risks such as terrorism or power breakdowns. All stakeholders - public authorities in charge of regulation and oversight, operators and users of infrastructures – have identified weaknesses as regards current practices. For example, incident scenarios impacting wide geographic areas have been overlooked. In Europe, there is a broad consensus on the need to strengthen business continuity requirements. The ultimate objective is clear: business continuity should contribute to enhance the soundness of the financial system as a whole. But it is not obvious to renew business continuity procedures. Among the challenges to be taken up, I see two major ones: (1) how far to go without putting at stake the cost efficiency of the systems?

Then, I will discuss the current and possible future roles that the Eurosystem’s central banks can play in that field. 1. Key issues in the field of payment infrastructures today  The three main issues I see as regards payment infrastructures today in Europe could be summarised as follows : (1) which role for payment infrastructures to support the European financial integration? (2) Which place to give to technological progress in the field of payment systems? (3) How to ensure business continuity of payment systems? 1.1. Supporting the European financial integration  The share of payment systems in money transfers between financial intermediaries is nearly 80%, versus 20% for the traditional correspondent banking arrangements. So, payment systems are essential for the financial sector as a whole and, therefore, can be considered as a key enabler in the process of the European financial integration. Such contribution of payment systems to the financial integration is embodied in the TARGET2 and SEPA projects. Both projects aim at the harmonisation and consolidation of the European “network” of payment infrastructures. While large-value payment systems have already attained a high level of integration and will further progress with the launch of TARGET2, retail payment systems are still very fragmented. In the segment of large-value payment systems, the degree of integration has increased very quickly. The rationale for setting up the two European-wide payment systems that currently exist, i.e. TARGET and EURO 1, was clearly to face the challenge of the EMU.