One of the main tasks of the Bank of Greece is to promote and oversee the smooth operation and efficiency of payment systems and means of payment (Article 2e of its Statute).
In this context, the Bank’s oversight function involves preventing and or addressing, in a timely manner, the risks to which payment systems are exposed, including legal, credit, operational and liquidity risk, with the aim to ensure the soundness and effectiveness of such systems, thereby safeguarding financial stability.
Similarly, the oversight of payment instruments aims to ensure their safety and efficiency; it thus focuses on minimising any risks that could undermine public confidence in payment instruments and, more generally, in the currency.
The objectives and scope of oversight are laid down in Monetary Policy Council Act 50/31.7.2002, which sets out:
(a) the framework of principles and standards governing payment systems and instruments;
(b) the methods and tools for the conduct of oversight; and
(c) the reporting requirements on payment system operators and/or payment service providers.
Conducting oversight of payment systems
Payment systems oversight is conducted by the Bank of Greece in line with the Eurosystem's approach, whereby payment systems are classified according to their importance into Systemically Important Payment Systems (SIPS) and Non-Systemically Important Payment Systems (non-SIPS). This classification is based on criteria related to size, market share, cross-border activity and the provision of settlement services to other financial market infrastructures.
Non-SIPS are further distinguished into prominently important retail payment systems (PIRPS) and other retail payment systems (ORPS).
The basis for Eurosystem oversight of all types of financial market infrastructures is provided by the CPSS-IOSCO Principles for Financial Market Infrastructures ((PFMIs) of April 2012, adopted by the Governing Council of the European Central Bank (ECB) in June 2013.
As regards payment systems, the PFMIs have been implemented by the ECB through Regulation (EU) 795/2014 on oversight requirements for systemically important payment systems, as amended by Regulation (EU) 2017/2094, as well as through the Revised oversight framework for retail payment systems (ECB, February 2016).
The PFMIs or a sub-set thereof apply to the various categories of payment systems as identified by the ECB, in proportion to the types of risks entailed by each category. To ensure a consistent and harmonised application of the PFMIs, the Eurosystem has developed an assessment methodology for payment systems.
With a view to ensuring that the potential risks stemming from the establishment of links between payment systems are properly managed, the ECB has established a harmonised single set of oversight expectations (Oversight expectations for links between retail payment systems, ECB, November 2012).
Regulatory framework and relevant publications
- Revised Eurosystem assessment methodology for payment systems (ECB, June 2018)
- Eurosystem Oversight Report 2016 (ECB, November 2017)
- Regulation (EU) 2017/2094 of the European Central Bank of 3 November 2017 amending Regulation (EU) No 795/2014 on oversight requirements for systemically important payment systems (ECB/2017/32)
- Eurosystem oversight policy framework (ECB, July 2016)
- Revised oversight framework for retail payment systems (ECB, February 2016)
- Regulation of the European Central Bank (EU) No. 795/2014 on oversight requirements for systemically important payment systems (July 2014)
- Oversight expectations for links between retail payment systems (ECB, November 2012)
- Glossary of terms related to payment, clearing and settlement systems (ECB, December 2009)
Conducting oversight of payment instruments
The Eurosystem has adopted uniform oversight standards for payment instruments used within the Single Euro Payments Area (SEPA), i.e. SEPA credit transfers, SEPA direct debits, and payment cards. The Eurosystem has also set a security framework for electronic money schemes.
Regulatory framework and relevant publications
- Guide for the assessment of card payment schemes against the oversight standards (ECB, February 2015)
- Guide for the assessment of credit transfer schemes against the oversight standards (ECB, November 2014)
- Guide for the assessment of direct debit schemes against the oversight standards (ECB, November 2014)
- Oversight framework for direct debit schemes (ECB, October 2010)
- Οversight framework for credit transfer schemes (ECB, October 2010)
- Harmonised oversight approach and oversight standards for payment instruments (ECB, February 2009)
- Oversight framework for card payment schemes - standards (ECB, January 2008)
- Electronic Money System Security Objectives (EMSSO) (ECB, May 2003)
- Report on Electronic Money (ECB, August 1998)