Journal of Financial Market Infrastructures

Manmohan Singh
International Monetary Fund

This third (summer) issue of Volume 12 of The Journal of Financial Market Infrastructures presents three papers and underscores the journal’s journey to embrace the role of new technologies, including digital money, changes in global payments systems and the evolving role of central counterparties, etc.

This issue includes a forum paper, typically reviewed by The Journal of Financial Market Infrastructures editorial team, as a thought piece to encourage analytical research, and two analytical papers, refereed via the standard review process by at least two independent referees.

The first analytical paper, titled “Toward immediacy and continuity in money and finance?” is by Ulrich Bindseil from the European Central Bank and Omid Malekan of Columbia University. While time has always been a pervasive phenomenon in money and finance, and settlement lags and discontinuities have remained unchanged in some areas for long periods, improvements in information and communication technology (ICT) appear to have driven the recent acceleration of a trend toward continuity and immediacy. This raises the question of whether the remaining closing hours and settlement lags will ultimately vanish (and in which areas). The authors review these time structure phenomena, including those derived from the time structuring of market activity, and how they are affected by progress in ICT and identify cases in which even ideal ICT would not seem to imply immediacy and continuity.

In “How concentrated is the clearing ecosystem and how has it changed since 2007?”, the second analytical paper, Ketan Patel of the Chicago Fed gives an overview of clearing activities following the global reform of the over-the-counter (OTC) derivatives market following the 2007–9 global financial crisis, including, in particular, the Dodd–Frank Act. Patel highlights that central counterparty clearing in the United States is now dominated by a few institutions and global systemically important banks and the level of concentration risk in the ecosystem could continue to increase, creating potential systemic risks despite improved risk management standards.

This issue’s Forum paper is “Let’s speak the same language: a formally defined model to describe and compare payment system architectures” by Kees van Hee from Eindhoven University, Anneke Kosse and PeterWierts from the Bank for International Settlements and Jacob Wijngaard from Groningen University. This paper develops a formal model for describing and comparing existing and proposed payment system architectures. The model represents three key functions of payment system architectures (issuance/withdrawal, holding and transfer of funds) and develops payment diagrams, using a precisely defined syntax, which can be used for any type of funds (eg, cash, card, e-money and stablecoin payments) and can be applied across different payment system architectures for domestic and cross-border account transfers. The authors also demonstrate how the diagrams correspond to the balance sheet approach commonly used in economics, and show that it offers added value by providing an end-to-end visualization of every stage of the payment journey. Their model provides a tool for central banks, regulators and the payment industry to better understand and compare existing and new payment system architectures.

The Journal of Financial Market Infrastructures continues to provide its readership with a selection of cutting-edge papers, novel ideas and analytics that underpin research, particularly in the areas of

• distributed ledger technologies, machine learning and artificial intelligence, and their impact on financial market infrastructures;
• payment, settlement and clearing systems;
• digital money (both private and public) and its impact on central bank operations and central bank balance sheets;
• tokenized deposits and stablecoins; and
• nonbank payment service providers and access to central bank payment rails.

We encourage regular submissions and we note that opportunities are available for selected papers to be presented at conferences or seminars for the dissemination of key messages. Previous papers have, for example, been presented at a joint seminar by the Bank for International Settlements Innovation Hub Hong Kong Centre and The Journal of Financial Market Infrastructures, and at the International Monetary Fund, while some forthcoming collaborations include those with central banks, including the joint 23rd Simulator Seminar, to be hosted by the Bank of Finland in August 2025.We very much hope you will enjoy reading the papers in this issue, and we welcome suggestions for topics that would be of particular interest to our readers as the landscape of financial market infrastructures continues to change rapidly.