Monitoring and stress testing financial market infrastructures

Kimmo Soramäki and Samantha Cook

The day-to-day operations and activities of various participants in the global financial system depend on the uninterrupted function of systemically important payment systems (SIPS), central counterparty clearing houses (CCPs), securities settlement systems (SSSs), central securities depositories (CSDs) and trade repositories (TRs). Together, these types of institutions are referred to as financial market infrastructure (FMI). FMI regulations across many countries include requirements for monitoring and stress testing of individual institutions and, for certain types of FMIs, may include supervisory stress testing across multiple FMIs and jurisdictions (CFTC, 2016).

To level set and introduce the relevant terminology, we first define different types of financial infrastructures and describe their primary activity and role in the financial system. Then, the flow of financial market transactions and how different types of FMI interact are explained in general terms.


The role and the primary activity of an FMI defines its type. It is important to note that financial innovation and/or introduction of new regulations may expand or contract the FMI universe. For example

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