CORE PRINCIPLES FOR SYSTEMICALLY IMPORTANT PAYMENT SYSTEMS

In 2001, the G-10 Committee on Payment and Settlement Systems (CPSS) published the Core Principles for Systemically Important Payment Systems (PDF). The principles are intended to encourage safe and efficient design and operation of systemically important payment systems. In addition, the CPSS has outlined four responsibilities of central banks in applying the Core Principles.

Australia’s systemically important payment system is the Reserve Bank Information and Transfer System (RITS). This system is owned and operated by the Reserve Bank and stands at the centre of the Australian payments system. It is a real-time gross settlement (RTGS) system, and settles around 90 per cent of interbank settlements by value. The system is also used for the settlement of low-value payments on a deferred net basis. The reliability of RITS is essential to the smooth functioning of the Australian payments system and the stability of the financial system more generally.

Self-Assessment of RITS

In August 2005, the Reserve Bank completed a Self-Assessment of the Reserve Bank Information and Transfer System (PDF 155) against the Core Principles as an input to the IMF Financial Sector Assessment Program (FSAP) assessment of Australia. The Bank's assessment was that RITS met all the Core Principles and that the Reserve Bank has met the responsibilities of central banks in applying the Core Principles. The Reserve Bank plans to update the self-assessment of RITS periodically.

IMF FSAP Assessment of RITS

In December 2005, the IMF assessed RITS against the Core Principles as part of its FSAP assessment of Australia. The assessment found RITS to be a sound and efficient system that complies with all the applicable Core Principles. The assessment also found that the Reserve Bank fulfils its responsibilities in applying the Core Principles. The IMF published its detailed assessment of RITS in November 2006. The assessment can be found starting on page 129 of the document Australia: Financial Sector Assessment Program — Detailed Assessment of Observance of Standards and Codes (PDF) on the IMF website.