Which aspect of payments does the Federal Reserve Policy on Payment System Risk address?

The Federal Reserve Policy on Payment System Risk primarily focuses on systemic risk within financial systems and infrastructure. This policy aims to identify, assess, and address risks that could potentially disrupt the payment systems which are vital for the overall stability of the financial system. By addressing systemic risk, the Federal Reserve ensures that payment systems operate efficiently and reliably, safeguarding trust in financial transactions.

The focus on systemic risk is crucial because failures in payment systems can have far-reaching implications, affecting not just individual institutions but the entire economy. By implementing policies and frameworks that mitigate these risks, the Federal Reserve plays a significant role in promoting the resilience of the financial infrastructure.

Other aspects like payment audits, regulatory compliance, and financial transaction processing, while important in their own right, do not specifically encapsulate the broader objective of the Federal Reserve's approach to managing risks associated with payment systems. The primary thrust of the policy is about maintaining stability and confidence in the payment systems by tackling systemic risks directly.