Session 1: The FMI Ecosystem: Recent Developments and the Road Ahead
27th April 2022
Technically speaking, Financial Market Infrastructures (FMIs) are multilateral systems used to clear, settle and record payments, securities, derivatives or other financial transactions.
Loosely speaking, they are regarded as the plumbing of the financial system, allowing financial institutions to connect to each other across distinct financial environments or markets.
Today, amid new technologies, access to flexible and affordable computing resources, and the demand for better retail and wholesale financial services, the FMI ecosystem is rapidly evolving.
In the first session of The FMI Broadcast, Prof Dr Ron Berndsen and Dr Kimmo Soramäki join us to discuss the traditional FMI ecosystem, how it is evolving and where it is heading using Ron Berndsen’s Warehouse metaphor. We also explored the benefits network analytics and simulation can offer.
The session covered:
- An introduction to Ron Berndsen’s Warehouse metaphor
- The Impact of Challenger FMIs on the FMI ecosystem. Is the warehouse being remodelled?
- The regulation and supervision of the new FMI ecosystem
- The role analytics and simulation play in the future of finance and FMIs
- The challenges new technologies such as distributed ledger technologies and tokenisation pose for market participants and financial authorities
Episode Guests:
Dr Kimmo Soramäki
Founder & CEO, FNA
Kimmo Soramaki is the Founder and CEO of FNA. Kimmo started his career as an economist at the Bank of Finland wherein 1997; he developed the first simulation model for interbank payment systems. In 2004, while at the research department of the Federal Reserve Bank of New York, he was among the first to apply methods from network theory to improve our understanding of financial systems. During the financial crisis of 2007-2008, Kimmo advised several central banks, including the Bank of England and European Central Bank, in modelling interconnections and systemic risk. This work led him to found FNA in 2013 to solve important issues around financial risk and for exploring the complex financial networks that play a continually larger role in the world around us. Kimmo holds a Doctor of Science in Operations Research and a Master of Science in Economics (Finance), both from Aalto University in Helsinki.
Prof Dr Ron Berndsen
Director, LCH Board and Professor Tilburg University
Professor Dr Ron Berndsen holds the endowed chair of Financial Market Infrastructures and Systemic risk at Tilburg University, The Netherlands. He is an expert in payment systems, securities and derivatives clearing and settlement, oversight and cryptocurrency. Ron also serves as an independent director on the boards of LCH Group Limited, the chair of LCH Limited and the LCH SA Risk Committees and is a member of the LCH Audit Committees and Technology, Security & Resilience Committees.
Ron Berndsen is also the editor-in-chief of the Journal of Financial Market Infrastructures and a member of the Advisory Council of the SWIFT Institute. He was Head of the Oversight Department and Head of the Market Infrastructures Policy Department at De Nederlandsche Bank. He also served as a member of the Market Infrastructure Board at the European Central Bank and as a member of the Committee on Payments and Market Infrastructures at the Bank of International Settlements.
Resources and Links
Explore the Warehouse metaphor further:
If you would like an electronic version of Prof Dr Ron Bernsden’s book, Financial Market Infrastructures and Payments: Warehouse Metaphor Textbook (2019 Edition), please don’t hesitate to contact Ron Bernsden.
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