In any settlement system, there is the risk that a failure of one bank to meet its obligations will trigger a chain reaction of defaults, eventually paralyzing the entire system. In addition, both payment and settlement systems and individual banks constituting the systems are supported by the market’s confidence.
First, the negotiations were not concerned with the liberalization of the capital account, but purely with the terms on which foreign suppliers would be allowed to do business, subject to whatever capital controls were in force.