NY Fed President Dudley Discusses Growing Influence of the Committee on Payments and Market Infrastructure
President and CEO of the Federal Reserve Bank of New York William C. Dudley discussed the evolution and growing influence of the Committee on Payments and Market Infrastructure ("CPMI"). He delivered his remarks at the CPMI 25th Anniversary Conference in Basel, Switzerland, on June 30, 2015.
Mr. Dudley outlined three major trends during his tenure as chair of the CPMI: (i) the development of a global financial system and the subsequent need for harmonization between national regulatory regimes, (ii) the increasing importance of financial market infrastructures ("FMIs") that corresponds to the growth of complexity in instruments and products and the central clearing of trades, and (iii) the safe operation of FMIs as their importance mushrooms within global financial systems to mitigate risk.
Mr. Dudley asserted that the CPMI's influence is growing globally because of its ability to stay ahead of these three trends. Additionally, Mr. Dudley listed the accomplishments of the Principles for Financial Market Infrastructure ("PFMI"): (i) global mandatory implementation, (ii) the substantial raising of requirements and an increase in their detail and scope, (iii) the underpinning of the PFMIs by "a detailed disclosure framework, an agreed assessment methodology, and a rigorous monitoring program to . . . promote consistency," (iv) greater harmonization and better "cross-border mutual recognition practices," (vi) central counterparty ("CCP") recovery and resilience, and coordination with other authorities to ensure aligned incentives, and (vii) the increased availability of data in trade repositories to facilitate the development of a more complete picture of market activities and emerging risks.
Mr. Dudley concluded by observing that the CPMI has "placed a lot of financial stability eggs in the FMI basket," and added that the CPMI will have to "monitor and oversee that basket carefully" while moving forward.