CBB Unveils FMIs and Payment Oversight Framework
Its primary objective is to mitigate and reduce systemic risk while providing core principles for effective banking supervision.
The Central Bank of Bahrain (CBB) has officially launched the Financial Market Infrastructures (FMIs) and Payment Oversight Framework.[1]
Crafted by the CBB's dedicated FMIs and Payment Oversight division, the framework defines the Oversight function based on the globally recognized Principles for Financial Market Infrastructures (PFMI) established by the Committee on Payment and Settlement Systems (CPSS).
Originally formed in 1990 by the G10 Governors and now operating under the banner of the Committee on Payments and Market Infrastructures (CPMI) within the Bank for International Settlements (BIS), CPSS has been instrumental in promoting financial stability.
Its primary objective is to mitigate and reduce systemic risk while providing core principles for effective banking supervision.
The framework aims to bolster the legal foundation for safeguarding settlement finality and netting arrangements. Additionally, it delineates the criteria for identifying FMIs that should fall under the oversight purview of the CBB.
Key components of the framework include outlining the roles, objectives, expectations, powers, standards, approach, and tools associated with the Oversight function. By doing so, the CBB seeks to adapt to the evolving landscape of the financial industry and enhance its ability to protect against potential risks.
The comprehensive FMIs and Payment Oversight Framework is now accessible online on the CBB's official website.