XML does not use a fixed definition, which is an important advantage because it allows for the ISO 20022 standard to be expanded or changed in the future for supporting new developments. From a system point of view, XML messages are actually easier to work with, than other formats. For most contemporary systems, XML is the default format when exporting data.
If just one small firm fails, then there may be a loss of confidence in the system. So it is certainly wise for supervisors to be worried; it is not only a matter of market efficiency. Let me concentrate on capital requirements. The main goal of Solvency II is that of linking each company’s capital requirement to the actual risks that it faces.