The financial system is meant to provide for the allocation of economic resources to productive investment opportunities, the trading of risks, the collecting and processing of information, and also the provision of clearing and settlement services. Also, the financial system can be under­stood as the dynamic response of institutions and processes to changing imperfections such as information and transaction costs. By facilitating market exchange of complex financial market services, Central Securities Depositories (CSDs), International Central Securities Depositories (ICSDs) and Central Counterparties (CCPs) can be taken as a means to achieve efficiency gains. This, in turn, facilitates capital accumulation and technological innovation that underlie the im­plementation of investment projects. Thereby a long-term economic growth process is supported and, correspondingly, welfare is improved.

However, despite these efficiency gains, there is scope for further improvements. Financial systems continue to be affected by market imperfections such as asymmetric informa­tion, negative externalities and limited competition. These imperfections not only challenge private market infrastructures but they also shape the responsi­bilities and interventions of the regulatory and oversight authorities. In the field of clearing and settlement systems, these authorities face some well-known challenges. There is a need to define and apply a common approach and understanding of the underlying issues, to tackle the risk di­mension of cross-border securities transactions adequately and to allow for an acceptable level playing field among large custodians and providers of clearing and settlement services. In view of these challenges, there is good reason to critically reassess rules and regulations related to secu­rities clearing and settlement systems as well as to the way regulatory and oversight responsibili­ties are implemented in practice. A predominantly national approach and an essentially sectoral solution, where payment system overseers and securities regulators do not co-operate in an inte­grated way, do not serve market needs any longer.

Finally, there is no alternative to close co-operation between private market players and regulatory and oversight authorities. I strongly believe that trust-based co-operation between the providers of market utilities and regulatory oversight authorities remains the key to the continued successful development of an efficient and secure financial system that can handle fast-changing needs in the future.