Central Bank of Bahrain unveils new financial market infrastructure and payment monitoring framework
In an unprecedented move, Central Bank of Bahrain (CBB) revealed Financial Market Infrastructure (FMI) and Payments Oversight Framework. This innovative initiative is the result of his FMI and Payments Oversight division at the Bank. The basic principles of this framework are heavily influenced by the Principles for Financial Market Infrastructures (PFMI) established by the Committee on Payment Systems (CPSS). The CPSS, now known as the Committee for Payments and Market Infrastructures (CPMI) under the Bank for International Settlements (BIS), is responsible for increasing financial stability by reducing systemic risk and promoting effective banking. It was established in 1990 by the G10 presidents with the core purpose of director.
Framework purpose and scope
The newly introduced Supervisory Framework aims to provide a clear understanding of the role, objectives, expectations, powers and standards of the supervisory function. We aim to respond and adapt to significant changes in the financial sector. Additionally, it aims to strengthen the legal framework for settlement finality and netting arrangements. The framework also focuses on identifying which FMIs are subject to CBB supervision and streamlining banks’ supervisory role.
Strengthening international standards and innovation
According to Hessa Al Sada, Executive Director of Banking at CBB, the newly introduced framework is a testament to CBB’s unwavering commitment to international standards and the safe and efficient operation of payment systems in Bahrain. . She believes this framework will increase confidence in the local financial system and encourage further growth and strengthening the economy. The framework is also expected to foster innovation in payment systems in line with the rapid evolution of the global financial ecosystem.
Framework availability
The FMI and Payments Oversight Framework document, which outlines the future of financial stability and innovation in Bahrain, is now publicly available on the CBB’s official website. This initiative marks an important step towards Bahrain’s financial resilience and technological advancement in the banking sector.
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