#1: The FMI Ecosystem: Recent Developments and the Road Ahead

6 Apr

27th April 2022

With:

| Prof. Dr Ron Berndsen (Tilburg University)

| Dr Kimmo Soramäki (FNA)

In Session #1, Prof. Dr. Ron Berndsen (Tilburg University) and Dr. Kimmo Soramäki (FNA) join the broadcast to discuss the structural transformation of Financial Market Infrastructures (FMIs). To explain this complex evolution, Prof. Berndsen introduces his famous "Warehouse Metaphor," where traditional FMIs act as the central repositories and logistics hubs for financial value.

The discussion explores whether this "warehouse" is being remodeled or entirely replaced by Challenger FMIs—nimble, tech-native entities that leverage cloud computing and DLT. As the ecosystem becomes more fragmented, our guests emphasize that Network Analytics and Simulation are no longer optional tools; they are the essential "blueprints" regulators and operators need to understand the hidden interdependencies and systemic risks within a rapidly diversifying financial landscape.

The session covered:

The Warehouse Metaphor: A conceptual deep dive into how FMIs store, process, and move financial "goods," and how new technology is forcing a redesign of the facility.
The Rise of Challenger FMIs: Analyzing how new entrants are disrupting the status quo by offering faster, cheaper settlement outside of traditional correspondent banking silos.
Regulating the New Frontier: Discussing the challenges of supervising decentralized systems where "responsibility" is distributed across code and networks rather than a single boardroom.
The Power of Network Analytics: How mapping the connections between financial institutions reveals systemic vulnerabilities that traditional auditing misses.
Simulation & Stress Testing: Using agent-based modeling to "test-drive" new FMI designs—like CBDCs or DLT rails—before they are deployed into the live economy.
Tokenization & DLT: Evaluating the friction between "old world" legal finality and "new world" cryptographic settlement.
The Road Ahead: Why the future of FMIs depends on finding a balance between the efficiency of decentralized tech and the safety of centralized oversight.