If CLS’s PVP mechanism had not existed and financial institutions had confronted foreign exchange settlement risk under the rapid undermining of confidence in the soundness of financial institutions, they would have had much more difficulty in funding U.S. dollars through the foreign exchange swap market.
The current regulatory differences across the euro area hinder the provision of efficient and automated services throughout the euro area. The proposed Payment Services Directive will remove these legal barriers. The Directive – and there we are privileged to have later on the explanations of Mr McCreevy - will create a clear and homogenous framework for making payments in euro.