The acceleration in fund transfers due to the increase in the transactions across the integrated global financial markets further increased the importance of payment systems. An efficient and safe payment system, which is compatible with international standards, ensures a sound and efficient financial system by minimizing potential risks. Since this further supports monetary policy and financial stability in general, central banks play roles in ensuring the smooth functioning of payment systems. It is possible to summarize the basic roles of central banks in this context as follows:
Establishing and operating payment systems
Central banks generally establish and operate the systemically important and the most critical payment systems in their countries by themselves.
Oversight of payment systems
The oversight of payment systems is accepted as a central banking function, in which the keynotes, guidelines and principles related to the payment and securities settlement systems area are determined; the developments in the existing and planned systems are monitored, payment and securities settlement systems are assessed against determined objectives and, where necessary, changes are induced in order to ensure the safe and efficient functioning of these systems. In this context, central banks play active roles in the oversight of all payment systems in their countries including the systems which are not operated by themselves.
Issuing regulations related to payment systems
With the aim of ensuring smooth, safe, effective and efficient functioning of the payment systems, Central Banks are given the power and responsibility of developing Law and issuing secondary regulations.
In some countries, this power is given to the central banks through central bank law while in others, it is granted by a specific law on payment systems or indirectly by regulations similar to banking legislation.
In Turkey, this regulatory power is given to the CBRT by both the Law No. 1211 on the Central Bank of the Republic of Turkey, and the Law No. 6493 on Payment and Securities Settlement Systems, Payment Services and Electronic Money Institutions.
Lender of last resort
Central banks generally provide various liquidity facilities to payment systems and participants of these systems in order to prevent the contagion effect of a participant's short term liquidity problem (i.e. Intra-day liquidity facility, late liquidity window, overnight liquidity facility).