Bank of Canada Oversight Activities during 2007 under the Payment Clearing and Settlement Act

The Bank of Canada has had formal responsibility for the oversight of clearing and settlement systems in Canada since 1996.2 The PCSA gives the Bank of Canada this responsibility for the purpose of controlling systemic risk. In this context, systemic risk is defined as the risk that the default of one participant in a clearing and settlement system could lead, through the activities of the system, to the default of other institutions or systems.