Why do we oversee
The Central Bank of Armenia defines the following oversight objectives in its policy:
- Ensure the stability (safety) of the payment and settlement systems operating in the Republic of Armenia by limiting (containing) risks. Ensuring the stability of payment and settlement systems is important, given that payment and settlement systems can be an environment for the systemic risks’ propagation and emergence from various sources. Risks may arise, for example, when a technical failure disrupts the smooth operation of the system or when a system participant is unable to fulfill its financial obligations, and the system lacks special mechanisms that could limit the chain spread of the negative consequences of a technical failure or financial issues to other participants
- Ensure the efficiency of the payment and settlement systems operating in the Republic of Armenia. In assessing the efficiency of payment and settlement systems, it is important to consider how well the system meets the needs and expectations of participants and their customers, how adaptable its technical support is to new technologies and market demands, and the extent to which the operator conducts cost control and ongoing efficiency analysis, including pricing. Inefficient operation of the system can harm the financial market or a particular segment of it and contribute to the emergence of risks, including for participants and end users. Moreover, operators of payment and settlement systems may incur high costs to enhance security, which are not always justified. To promote system efficiency, Central Bank treat it as a key oversight objective.
In addition to the afore mentioned primary objectives, the Central Bank of Armenia also emphasizes strengthening public confidence in non-cash payments, defining this as an auxiliary oversight goal.