Australia: Financial Sector Assessment Program-Technical Note-Supervision, Oversight and Resolution Planning of Financial Market Infrastructures

IMF Staff Country Reports, February 21, 2019

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This paper analyzes systemic risks related to Financial Market Infrastructures (FMI) in Australia, in particular central counterparties (CCP).
Supervision and oversight of FMIs is well-established with supervisory expectations importantly strengthened over the past few years.
Enforcement powers for the supervision of CCPs and Securities Settlement Systems should be strengthened in accordance with the Principles for Financial Market Infrastructures.

Supervision and oversight framework for FMIs in Australia is well-established and has been significantly strengthened in recent years.
Clarity is needed in the Reserve Bank of Australia’s approach to payment systems oversight, particularly regarding requirements for systemically and less systemically important payment systems.
Australian authorities could benefit from the experiences and lessons learned by other jurisdictions through regular and more specialized coordination and communication efforts with other supervisors and resolution authorities.
The authorities should review, and could benefit from, the experiences and lessons learned in the formulation and codification of Australia’s bank and insurer resolution regime.

The Reserve Bank of Australia should consider reviewing its approach to payment systems oversight to provide greater clarity on requirements for systemically and less systemically important payment systems.
Enhance inter-jurisdictional coordination and communication with other supervisors and resolution authorities to leverage international experience and lessons learned.
Review and potentially strengthen the formulation and codification of Australia’s bank and insurer resolution regime drawing on domestic and international lessons.
Strengthen enforcement powers available for supervision of CCPs and Securities Settlement Systems to align with the Principles for Financial Market Infrastructures.

Subject: Bank resolution framework, Financial crises, Financial market infrastructure, Financial markets, Financial regulation and supervision, Payment systems, PFM information systems, Principles for Financial Market Infrastructures, Public financial management (PFM)
Keywords: ASX Clear, Bank resolution framework, CR, CS facility, Financial market infrastructure, Global, ISCR, payment system, Payment systems, PFM information systems, Principles for Financial Market Infrastructures, RBA assessment, RBA-ASIC MOU