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Further, the paper analyses current consolidation initiatives between Payments Embedded SSSs and international central securities depositories (ICSDs)
It concludes that their solutions are flawed and give rise to the potential for contagion within the Eurozone. It is believed that the interdependence of PSs and Payments Embedded SSSs has been clouded by smoke and mirrors with the addition of agent and custodian banks and CCPs and as such the paper discusses accountability in the event of a failure if current consolidation initiatives, combining Eurozone and non-Eurozone clearing and settlement activities, are allowed to proceed unhindered.
The paper proposes that Eurozone PSs and Payments Embedded SSSs have converged and must be independent utilities to benefit fully from relevant Eurozone arrangements to create ‘legal certainty’. This can be achieved by placing Payments Embedded SSSs under the oversight of the European Central Bank (ECB), European System of Central Banks (ESCB) and National Central Banks (NCBs) using the arrangements governing PSs.