A secure and efficient financial infrastructure, but room for improvement
Norges Bank is today publishing Financial Infrastructure Report 2021 and Norges Bank Papers 2/2021, "Retail payment services 2020".
There have been few disruptions in the Norwegian financial infrastructure in recent years, and the infrastructure has functioned smoothly also during the coronavirus pandemic. Norges Bank considers the functioning of the financial infrastructure to be secure and efficient.
New framework for strengthening cyber resilience
Among the most serious threats to critical financial infrastructure is digital mapping and sabotage. An attack on an individual system can have consequences for other parts of the financial infrastructure and at worst, for the entire financial system.
"Testing for and identifying risks of cyber incidents in the banking and payment system can be improved. The Financial Supervisory Authority of Norway and Norges Bank have drawn up a proposal for testing the cyber resilience of the Norwegian financial sector. This testing will give us a better insight into vulnerabilities and how they can lead to systemic risk and pose a threat to financial stability", says Deputy Governor Ida Wolden Bache.
Measures being considered with a view to improving real-time payments
Payments where the funds are available in the payee’s account seconds after the payment is initiated are called real-time payments. A well-functioning system for real-time payments is an important part of an efficient payment system. The infrastructure for real-time payments was strengthened in 2020, but retail services atop the underlying infrastructure must still be further improved and developed.
"Norges Bank is now assessing how the real-time payment infrastructure can best be further developed, including whether Norges Bank should expand its operational role. This matter will soon be circulated for comment by the industry and other stakeholders", says the Deputy Governor.
Central bank money and crypto-assets
Norges Bank currently issues central bank money in the form of cash. Central bank money has attributes that promote confidence in the monetary system and payment system efficiency. For central bank money to have these attributes, it must be available to and easy to use by the general public.
Norges Bank is assessing whether central bank money should also be issued in digital form (a central bank digital currency). Norges Bank’s research is motivated by falling cash usage and the precautionary principle in the event of undesired structural changes in the monetary and payment system. Norges Bank recently decided to continue this research, including experimental testing of technical solutions.
Recently, a growing number of investors have invested in crypto-assets, and payment service providers have made crypto-assets available to their customers as a means of payment. While the underlying technology provides new opportunities, crypto-assets also entail risks that require new regulations.
"Increased use of crypto-assets may be important for the safety and efficiency of the payment system. Norges Bank is closely monitoring the payment system and will help to ensure that it will also be attractive and safe to pay in NOK in the future", says the Deputy Governor.
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