2  BIS Review 9/2001  Domestic and International payments liquidity in the Republic of Macedonia In 2000, the liquidity of the banking system considerably improved. In January – December 2000, compared to the same period of 1999, the average daily liquidity of the banking system was by 42.1% higher. This resulted in decrement of the demand for liquid funds by the banks, which was reflected upon the movement of the interest rate on the Money Market. In December 2000, the average weighted interest rate on the Money Market amounted to 7.1% and was by 4.5 percentage points lower compared to the same month of 1999. The international liquidity in the payments is visible through the ability of servicing the external debt. On September 30, 2000, the external debt of the Republic of Macedonia, based on disbursed medium-term and long term foreign credits, amounted to USD 1,400.8 million. Compared to the end of 1999, the external debt of the Republic of Macedonia was reduced by USD 37.7 million, as a result of the repayment of the regular liabilities, as well as the exchange rate differentials. According to the payment schedule, liabilities in the total amount of USD 43.3 million are projected to be paid in the last quarter of the year. At the end of September 2000, the short-term debt of the private sector of the Republic of Macedonia amounted to USD 42.9 million, and compared to the end of 1999 was by USD 10.8 million lower.
Swiss Interbank Clearing, for example, has admitted participants from abroad since the late 1990s. Second, the consolidation of infrastructures is in full swing, especially in Europe. In some cases, consolidation takes place through mergers between formerly independent systems. For example, Euroclear group integrated the formerly independent central securities depositories of the Netherlands, Belgium, France and the UK. In other instances, consolidation takes a less direct form. National infrastructures may, for example, set up mutual links to facilitate trade, i.e. the settlement of cross-border transactions. The internationalisation of stock markets has also made it possible to trade an increasing number of stocks on several different trading platforms. And finally, we have also witnessed the emergence of a few completely new infrastructures which have adopted an international – and in some cases even global – focus from the outset. A classic example is the Continuous Linked Settlement (CLS) system, which was designed for the settlement of foreign exchange transactions and started operations just over four years ago. It now settles transactions in as many as 15 currencies. But how has the opening up of trading centres and settlement channels, which traditionally had a domestic focus, impacted on financial stability? On the one hand, it is obvious that the adjustment of the financial market infrastructures to the special features of global financial markets may contribute to reducing risks related to the settlement of cross-border transactions. For example, the risk associated with traditional foreign exchange transaction settlements (Herstatt risk) can be largely eliminated through CLS.