Central banks monitor financial plumbing to prevent system-wide disruptions. The global regulatory standards for these networks are defined by the Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) through the Principles for Financial Market Infrastructures (PFMI). [1, 2]
Core PFMI Governance Mandates
[CPMI-IOSCO Principles]
  |- Principle 4: Credit Risk Controls -> Requires pre-funded resources to cover participant defaults
  |- Principle 7: Liquidity Metrics ----> Mandates highly liquid assets to ensure same-day settlement
  |- Principle 8: Settlement Finality ---> Requires legally binding, unchangeable finality rules

By enforcing these principles, central banks ensure that payment clearing networks, central counterparties, and securities settlement systems maintain the financial reserves and operational redundancies needed to survive severe market crises.
 
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