In the second phase of its deliberations, the Committee of Governors is concentrating on the quantity and quality of private banking in the region. The establishment of sound and well-managed privately-owned banking institutions must be encouraged to provide financial services in a competitive environment. The two tiers of banking, that is central banking and private banking, must be separated on a clearly-defined basis.
In the third phase of financial co-ordination, the central bank Governors are working together in a joint effort to develop compatible and inter-linkable national payments, clearing and settlement systems for financial transactions. Eventually, the national systems must be linked to each other to provide for more effective cross-border settlement of inter-regional financial transactions.