niklaus blattner : the task of overseeing payment and securities settlement systems 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, 12 december 2003. * * * with the revised national bank law, the national bank receives an explicit mandate to contribute to the stability of the financial system. this is, in particular, laid down specifically in the law in the task of overseeing payment and securities settlement systems. why does the national bank oversee payment and securities settlement systems? by overseeing payment and securities settlement systems, the national bank is supporting the security and efficiency of financial market infrastructures in switzerland. in doing so, it is helping to ensure the stability of the financial system as a whole. this stability is essential to successful monetary policy in particular, and to the economic efficiency of switzerland in general. the importance of a market economy ’ s financial system derives from the function that it fulfils. the financial system is responsible for the allocation of financial resources and risks, as well as intermediation between savers and investors. a financial system can be described as stable if it performs these tasks efficiently and its markets and institutions prove themselves to be shock - resistant. another part of a stable financial system are secure financial market infrastructures. these include, specifically, payment systems and systems for the clearing and settlement of financial instruments ( securities settlement systems ). deficient payment and securities settlement systems might potentially trigger a crisis in the system. an operational or technical system failure can delay transaction settlement so severely - or even prevent it for such a long period - that widespread credit or liquidity problems among financial institutions result. in particularly serious cases, the financial institutions concerned, and perhaps even the financial markets, are no longer able to perform their role in the economy or can do so to only a limited extent. yet on the other hand, payment and securities settlement systems also play a major part in preventing the transfer of payment or delivery problems from one participant to the others. such difficulties might also trigger a chain reaction which could jeopardise the entire system. this makes the architecture of payment and securities settlement systems all the more important, because it determines their capacity to limit the transfer of weaknesses. secure and efficient financial market infrastructures are especially important to the swiss economy, which has a large financial sector and generates significant payment flows. their significance is illustrated by the relevant figures : every day, sums amounting

the smooth conduct of the primary auctions in g - secs and facilitate the orderly evolution of the yield curve. reforms in regulatory framework and financial markets 12. in spite of the two black swan events that have dominated the recent discourse, the rbi has steadfastly persevered with regulatory reforms aimed at the development of the domestic financial markets. our approach is based on the principle of adapting to the needs of a modernising financial market as it integrates with the rest of the world. 13. let me touch upon on some of the regulatory changes which have taken place during the last three years. the orderly development of the sovereign yield curve needs significant market liquidity at important benchmark tenor points and supply of g - secs of various tenors to diverse class of market participants matching with their investment requirements. to this end, the benchmark security issuance strategy was introduced during 2020 - 21 under which government securities ( gsecs ) of specific benchmark tenors of 2, 5, 10, 14, 30 and 40 - years are issued. this year, g - secs with a 7 - year tenor have also been introduced after market consultation. 14. issuance of green bonds provides a strong signal of a country ’ s commitment to a low - carbon economy. it also helps in bringing down the cost of capital for green projects. following the announcement in the union budget for 2022 - 23, the government and the rbi are putting in place a framework for issuance of sovereign green bonds, in line with global standards. 15. as part of our continuing efforts to increase retail participation in g - secs, the ‘ rbi retail direct scheme ’ was launched in november 2021 to facilitate individual investors to conveniently invest in g - secs, state development loans ( sdls ) and sovereign gold bonds. further, to ensure liquidity to the retail investor, the “ retail direct scheme - market making ” was notified on january 04, 2022. the scheme requires primary dealers to respond to buy / sell requests from the retail investors throughout market hours. 16. the rbi has continuously engaged in ensuring state - of - the - art infrastructure for trading, settlement and timely dissemination of information in the g - sec market. an important initiative in this context is the introduction of the request for quote ( rfq ) dealing mode on ndsom in october 2020. the rfq mode aims to enable market participants to negotiate trades on the nds - om platform itself for better price discovery.