I might be confused: I thought the only reason those third parties were trusted in the first place was that they were co-owned by all the banks? My point was, you replace one cooperative system with another functionally equivalent one, and nothing much changes except that there are fees to be collected in the process. A centralized settlement system is like a commodity, it's standardized and cheap to run, but a blockchain can be sold. There's also an unjustified assumption that the new system wouldn't have banks paying fees, because blockchain. There's a long series of posts on Alphaville about just that. All those trust and legal issue don't just disappear.

Think about this, burning power in every office while gaining a 100x redundancy factor may be worth it.

The cost of going from 99% to 99.999% can be a 100000x increase in the software space.

For reference Bitcoin has a 99.99% uptime per http://www.bitcoinuptime.com/

So, instead they are going to pay fees to third parties who provide cloud-based "blockchain-as-a-service" which functions as a centralized (on Azure) settlement database?