The Global Payments Ecosystem

This course will outline the Global Payments System, both domestic and cross-border, emphasizing Large Value Transfers and the infrastructure of the global financial and monetary system. Payment system operators, by definition, pose systemic risks to the global financial system and the global economy, given their criticality and interconnections to businesses, financial institutions, and households worldwide. The course will also examine the digital transformation in payments, the implications of sanctions, and financial crimes such as fraud, Know Your Customer (KYC), Anti-Money Laundering (AML), and cybersecurity.Financial market Infrastructures (FMIs) and Payment Settlement Systems (RTGSs) like Fedwire, CHIPS, Target, DTCC, SWIFT, and CLS will be reviewed in the context of their economic functions, interconnectivity, governance, and regulation. There will be a particular focus on regulation, application of relevant law, and the risk environment for payment system operators and their customers. A review of relevant policy considerations will be undertaken. The impact of emerging technologies, including tokenization, Central Bank Digital Currencies (CBDC), and AI, will be explored in a rapidly changing environment. No discussion on the Global Payments System is complete without discussing the geopolitical environment. This course will explore how these forces have played out in the past and the near future, including a student mock debate about how they might evolve in an increasingly divided world. Instructor: Yawar Shah