More seriously, the settlement of foreign exchange transactions around the world was disrupted because the functioning of the CLS system depends on the ability to make and receive payments in all currencies in CLS, including sterling. The greatest potential for systemic damage from payment systems arises in the event of a failure of one or more major counterparties to financial transactions, particularly derivative transactions.
For instance, the Bank for International Settlements' Committee on Payments and Market Infrastructures has worked with financial industry representatives to support harmonised adoption and usage of ISO 20022 for crossborder payments.2 This brings me to the third area, which is the area where we, as central bankers, can have the greatest impact: fostering interoperability between payment infrastructures and expanding their services.