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Strategy and experience

Payment, securities and financial assets clearing and settlement systems and arrangements, also known as payments and financial market infrastructures, are a fundamental piece for the smooth functioning of the economy and the essential backbone of the financial system. Gaps in their design, regulation, oversight and functioning may pose significant risks to the financial system and the wider economy.

Before 1999, payments and financial market infrastructures in the Latin America and the Caribbean varied widely in their efficiency, safety and general development. In response to this, the World Bank in partnership with the Centro de Estudios Monetarios Latinoamericanos (CEMLA) launched in January 1999 the Western Hemisphere Payments and Securities Clearing and Settlement Initiative*(WHI) to provide institutional support to central banks and other financial authorities in upgrading and modernizing existing systems and arrangements in consistency with international standards and best practices.

In 2003, the WHI evolved into a permanent technical cooperation central banking forum, the Western Hemisphere Payments and Securities Settlement Forum (WHF), also known as the Payments Forum. The WHF reflects the institutional capacity already created throughout the region and its institutional arrangements ensure the continuity to the efforts initiated within the context of the WHI.

The WHF’s ultimate objective is to permanently contribute with Latin American and Caribbean central banks and other relevant financial authorities in strengthening their national payments and financial market infrastructures. This is being accomplished by:

  • Permanent dialogue and debate of relevant and common issues of the Forum’s members.

  • Policy implementation analysis, through regional work led by the Forum’s members and a series of working group and high-level events.

  • Technical assistance facilities to support and guide authorities in modernizing their payments and financial market infrastructures in accordance with best practices.

  • Tailored capacity building and training activities targeted to meet needs of Forum’s members.

 

 

 

* The Joint Ministerial Statement issued by the Summit of the Americas Second Western Hemisphere Finance Ministers' Meeting (Chile, November 1997) that mentioned as one of the action points to strengthen financial markets and called "on the World Bank Group, in conjunction with the International Organization of Securities Regulators (IOSCO), the IADB and other interested parties, to compare existing clearing and settlement systems of Latin American and Caribbean countries to standards of the Bank for International Settlements and to the framework outlined in the IOSCO paper. Based on this review, the Ministers called “on national and regional authorities to implement changes which promote efficient and secure clearing and settlement systems consistent with those standards." As a result of this call, the Western Hemisphere Payments and Securities Clearing and Settlement Initiative (WHI) was launched.