The domestic FMIs have been assessed as in good overall observance with the PFMI.
To enhance the safety and efficiency of the domestic FMIs, the BOK will respond actively to the SSBs' implementation monitoring/assessments on the one hand, while on the other hand also providing support to ensure the adoption of international standards such as the PFMI within the earliest possible time.
In the course of implementing international standards such as the PFMI, the BOK plans to enhance its payment and settlement system oversight function by improving its framework for oversight and risk analysis.
Furthering Implementation of the PFMI (1) Inducement in compliance with PFMI and pursuit of improvements (2) Pursuit of establishment of cooperative arrangement with related authorities II.
These developments are worth following as the PFMI are implemented in the coming months and years.
A consequence of PFMI principle 7 is that the liquidity risks undertaken to mitigate credit risk should be well contained by mandating robust minimum liquidity resources for payments, clearing, and settlement institutions.
25) However, CPSS-IOSCO (2012) also recognizes the obvious moral hazard problem of having a payments, clearing, or settlement utility count emergency (that is, nonroutine) central bank liquidity as part of its liquidity resources for the purposes of meeting the standards mandated by the PFMI.
In meeting the new PFMI
standards, Singapore Exchange Derivatives Clearing (SGX-DC) became a Qualifying Counterparty under the Basel III framework.