to around 180 billion swiss francs pass between financial institutions via swiss interbank clearing system ( sic ), switzerland ’ s most important payment system. with a system of this scale it is easy to imagine that problems with the clearing or settlement of transactions might jeopardise the stability of the financial system as a whole. i would like here to outline how the swiss national bank can help to ensure more efficient and more reliable financial market infrastructures through its oversight of payment and securities settlement systems. i would, however, like to make one key point right away : state intervention in, or regulation of, financial market infrastructures is justified only if it must be assumed that the private sector will not necessarily perform these functions of its own accord in a manner that is best for the economy. in reality, when designing a system its operators and participants will probably consider the direct costs that they would bear themselves in the event of a system failure or the withdrawal of a participant. however, the remaining costs that are not borne directly by the parties involved in the event of a system crisis tend to be forgotten in management calculations. it cannot be ruled out, then, that operators and participants take less account of the security of a system than would be necessary from the perspective of the broader economy. it is a classic problem of market failure. the sense and purpose of overseeing payment and securities settlement systems is to give due consideration to the externalities that would be neglected by the private sector and to ensure that financial market infrastructures provide the optimum degree of reliability from the point of view of the national economy. the oversight of payment and securities settlement systems in practice in future, the national bank will be taking a risk - oriented approach, i. e. we will deploy our resources in those specific areas in which the risks are particularly high. the national bank law stipulates a three - tier oversight process. the first tier is an obligation on the part of operators of payment and securities settlement systems to provide statistical information. the national bank will use the data it collects to gain an overview of the breadth and importance of the systems and instruments for the clearing and settlement of payments and securities trades that are available in switzerland. the second tier is a more wide - ranging disclosure obligation that is imposed upon the operators of securities settlement systems and those payment systems which process payments in excess of 25 billion swiss francs a year. with payment systems of this size and larger, the national bank will look in greater detail into the extent to which they might jeopa

economic outlook, volume 2016, issue 2. ricardo, david ( 1817 ), on the principles of political economy and taxation, london : john murray. sachs, jeffrey and andrew warner ( 1995 ), economic reform and the process of global integration, brookings papers on economic activity, 1995 ( 1 ), pp. 1 – 118. world trade organization ( 2017 ), world trade report. page 9 / 9 protectionism complicates monetary policy thomas j. jordan chairman of the governing board swiss national bank volkswirtschaftliche gesellschaft des kantons bern berne, 31 october 2018 chart 1 31. 10. 2018 volkswirtschaftliche gesellschaft des kantons bern | thomas j. jordan | © swiss national bank chart 2 31. 10. 2018 volkswirtschaftliche gesellschaft des kantons bern | thomas j. jordan | © swiss national bank chart 3 31. 10. 2018 volkswirtschaftliche gesellschaft des kantons bern | thomas j. jordan | © swiss national bank chart 4 31. 10. 2018 volkswirtschaftliche gesellschaft des kantons bern | thomas j. jordan | © swiss national bank chart 5 greater uncertainty / appreciation of the chf 31. 10. 2018 volkswirtschaftliche gesellschaft des kantons bern | thomas j. jordan | © swiss national bank chart 6 31. 10. 2018 volkswirtschaftliche gesellschaft des kantons bern | thomas j. jordan | © swiss national bank