For example, payments processed through Faster Payments grew from 295 million with a total value of £ in 2009 to 1,247 million payments with a total value of £ in 2015. 13 These were developed by the Committee on Payments and Market Infrastructures (CPMI) and the International Organisation of Securities Commissions (IOSCO). 7  All speeches are available online at www.bankofengland.co.uk/speeches  7  Operational risk is the risk of disruption from systems and processes, from human errors and management failures and from external events and external actors. All types of financial market infrastructure firms face operational risks. Indeed, for many of these firms, it is the ‘number one’ risk they face. A serious operational incident affecting one of these global pipes is likely to have an impact on the system as a whole in several jurisdictions, rather than just upon the infrastructure firm itself. The PFMIs require financial market infrastructure to identify plausible sources of operational risk, and ways to mitigate their impact. 14  FMIs are also required to have credible business continuity and recovery plans,  with the aim of resuming operations within a maximum of two hours following the most disruptive events. However, as the infrastructure that supports the financial system grows in scale, complexity and inter-connectedness, the potential risks and costs of systemic operational risks increase as well. To successfully mitigate this requires a focus on both operational risk and on operational resilience; the ability to respond and recover, as well as prevent and protect.
These central counterparties (known as CCPs), originally developed to manage the risks in agricultural commodity contracts, to act as intermediaries, taking and adjusting collateral from both sides to a financial contract so that if one party fails during the lifetime of the contract and cannot meet its obligations, the parties with whom they have traded are protected. 3  All speeches are available online at www.bankofengland.co.uk/speeches  3  But regulators and central banks however have had quite a hand in the making of these pipes and in mandating their use and terms of access – as a way of reducing risk in the system. The CLS international payment system, for example, was created by the FX industry, after much prodding from central banks, as a way of addressing regulatory concerns about the level of settlement risk in the system following the failure of Herstatt bank in the 1970s. Similarly, in response to regulatory demands post crisis, market participants have developed the role of CCPs to enable central clearing of a widening range of financial contracts. And, in line with their role in encouraging the creation and use of these systems, authorities internationally have long taken a close interest in their regulation and supervision. In 1990 the G10 Governors established the Committee on Payment and Settlement Systems (CPSS), with a membership that was enlarged to include 25 central banks in subsequent years. In 2014, CPSS was renamed to become the Committee on Payments and Market Infrastructures (CPMI).