The general objectives of the Bank’s regulatory regime are to ensure that the payment and securities settlement systems that operate within the State are safe, effective and efficient, and that access to such systems is not restricted. In addition, the systems themselves should not cause, or add to, instability in the operation of financial markets. Since payment systems are an essential vehicle for the implementation of monetary policy, their regulation is also aimed at safeguarding the transmission channel for monetary policy.
There are two wholesale payment systems operating in Ireland, TARGET2 and EURO1, and also two retail payment systems, STEP2 and the Irish Paper Clearing Company (IPCC) that respectively handle the clearing and settlement of electronic and paper payment instruments (mainly cheques). The oversight process is based on the regular monitoring and assessment of these systems against internationally recognised oversight standards and principles that, in turn, are mainly designed to make financial market infrastructures more resilient to technical/systems failures, defaults by system participants and to financial crises.
The Bank is the overseer for the IPCC, while the ECB acts as the lead overseer of TARGET2, EURO1 and STEP2. A co-operative oversight model is employed with respect to the latter three payment systems, whereby the ECB acts in close co-operation with the national central banks of the countries that use these systems. The Bank has recently increased its involvement in the co-operative oversight process in respect of STEP2, given the dependence of Ireland on this system for the settlement of electronic retail payments. A co-operative oversight regime also applies in respect of the international card payment schemes that operate in Ireland.