As I have often said, to continue to be effective, government’s regulatory role must increasingly be focused on assuring that adequate risk management systems are in place in the private sector. As financial systems have become more complex, detailed rules and standards have become both more burdensome and less effective.
If we wish to foster financial innovation, we must first be careful not to impose rules that inhibit it, and we must be especially watchful that we not unduly impede our increasingly broad electronic payments system. Thus, the private sector needs to play the pivotal role in determining what payment services consumers and businesses actually demand and in supplying those services.