- und wertpapierinfrastrukturen vielfaltigen risiken ausgesetzt, beispielsweise kreditrisiken, liquiditatsrisiken und operationellen risiken, die dem systembetreiber, den systemteilnehmern und auch der breiten offentlichkeit kosten verursachen konnen. unter bestimmten umstanden konnen diese risiken sogar systemisch werden. erfolgt namlich seitens einer bank keine verrechnung, kann dies in einigen fallen die fahigkeit anderer banken, bereits abgewickelte geschafte reibungslos zu verrechnen, beeintrachtigen und somit eine kettenreaktion auslosen, die zur destabilisierung des gesamten finanzsystems fuhren kann. similarly, delays in settling transactions by a participant will typically affect the ability of other participants to pay. if the functioning of the system as a whole is disrupted, its participants and possibly the general public might be adversely affected. in such cases, individual participants ( or the system operator ) externalise costs to other parties and therefore do not necessarily have sufficient incentives to act prudently and avoid risk. this is particularly true if the participants or operator assume that they are “ too big to fail ” and expect that a public authority will intervene in a crisis situation. the central bank oversight function represents one form of public involvement in controlling such systemic risks. it aims to ensure that both participants and operators have adequate incentives to act prudently, avoid risk and minimise social costs. swift is the most important provider of messaging services for financial transactions in the world. as a consequence, the sound functioning of swift is a precondition for the overall smooth functioning of payment and settlement systems and, as such, also for financial stability. as a matter of fact, any disruption of swift ’ s messaging activity could trigger further disruption amongst its users, which include a very large number of systemically important payment and settlement systems. in view of swift ’ s critical role in the smooth functioning of the global financial system, the g10 central banks decided to set up a special cooperative framework for the oversight of swift. this oversight framework was formalised in

options that would result in a very simple set of rules that can be specified in just 12 pages of text. that is approximately half the length of the original 1988 accord. the “ simplified standardised approach ”, as we call it, is intended to be useful for those countries that do not wish to adopt all of the options available under the new framework. the trade - off, however, reflects the fact that the policy balance at stake is between simplicity and risk - sensitivity ; if one chooses simpler rules, the cost is less sensitivity to risk and hence greater conservatism in capital requirements. competition and consistency of application another broad concern that the committee has worked to address is basel ii ’ s impact on global competition. in particular, some have asked whether banks that choose basel ii ’ s advanced approaches will enjoy benefits over those that choose simpler approaches. others have wondered whether banks that remain on the 1988 accord for some time will be disadvantaged. to respond to these concerns, we should understand that adopting an advanced approach does not automatically reduce a bank ’ s capital requirements. basel ii is intended to align capital requirements more closely to risk. furthermore, some national supervisors may set higher capital requirements than implied by basel i, perhaps even higher than those implied by basel ii, depending on the risk environment. for those banks that do experience reductions in capital as a result of basel ii, some observers have questioned whether the lower requirements might provide certain advantages and make it easier for those banks to acquire other banks that do not share in the same benefits. history suggests that this particular concern may be unfounded. in a paper published this past february by the federal reserve, researchers reported that they did not find convincing evidence that past changes in capital requirements have had a substantial impact on mergers between banks. the issue of competition between banks has also come up in the context of competition between countries. here, we should remember that basel ii is intended to help ensure that international competition in banking markets is driven by the strengths of each bank, rather than by differences in each country ’ s rules. one way that the committee has sought to promote a consistent application of the new framework is by providing banks and supervisors with detailed requirements where necessary. as i have already mentioned, these details may add to the appearance of length and complexity in basel ii, but that is a small price to pay for greater consistency and a more level playing field. however, given the need to have a framework which can be adapted to a wide range of circumstances, cooperation among