Systemically Important Payment System

A Systemically Important Payment System (SIPS) is a payment systems whose failure could potentially endanger the operation of the whole economy. In general, these are the major payment clearing systems or real-time gross settlement systems of individual countries, but in the case of Europe, there are certain pan-European payment systems. As of late 2023, the European Central Bank had designated five payment systems as SIPS, namely T2, EURO1, STEP2, CORE(FR), and Mastercard Europe.^: 12

In the event of a bank failure, adherence to the rules for the operation of SIPS should prevent a domino effect whereby payment obligations of the failing bank are effected against the solvent banks. Clearly, this does not prevent the effects of a bank failure from spreading; however, it closes off one route.