Tiering in CHAPS

In the United Kingdom, many banks access payment systems via relationships with other banks. This introduces risks to financial stability which can be reduced by increasing direct participation. The Bank has worked with the payments industry to increase direct participation in CHAPS, as part of its broader work to reduce systemic risk in the United Kingdom. As a consequence, by 2015 a number of banks that are systemically important to the CHAPS system will become direct participants. This is a structural change which will significantly reduce interbank exposures, and hence will enhance UK financial stability.