In this regard, the Central Bank has ensured that staff will not be forcibly retrenched as a result of this process and that the salary of no employee will be reduced from that which prevailed at end 2013. Also, financial institutions were encouraged to appoint competent Human Resource Consultants to perform independent reviews on senior management, while the Central Bank decided to keep the staff unions informed of the consolidation process to minimise any confusion in the minds of the employees. Fourth: Revival plan for cash-strapped NBFIs In our consolidation strategy, a common merger and acquisition plan was designed for wellrun financial institutions. However, there are few finance companies facing liquidity constraints. For such companies, we introduced revival plans on a case by case basis so that public confidence will be restored and financial system stability will be sustained. Under this revival plan, the Central Bank decided to provide supplementary long-term concessional funding facility through SLDILSS for any new investor or financial institution, which acquires or merges with any cash-strapped NBFI, so that operations of such NBFI could be revived and restructured without weakening the financial position of the acquirer. The liquidity support would be granted on a case by case basis after a careful assessment of the financial position and business restructuring plan of the cash-strapped NBFI by the Central Bank.
This approach was consciously at odds with that adopted for TAURUS, which had tried to be all things to all people 7. But it also focused minds in the industry, forcing them to make difficult tradeoffs, and creating a clear incentive to market providers to produce “add ons” for extra user functions. The project team itself projected a similarly minimalist, open approach in its work – building on their own past experience of having developed the Bank’s system for dematerialised settlement of gilts (the “Central Gilts Office”), involving a full range of disciplines (including policy, IT and legal) in all outreach and design meetings, and embracing a robust attitude to analysis and self-criticism, perhaps best summed up in their T-shirt logo “Purist and Bloody-Minded”. Not everything went to plan. Some early project management structures were found wanting. PWC’s audit of the project in Spring 1994 identified what might be euphemistically termed “a range of unfinished business”, but allowed the project to go forward. And the early months of operation after that launch day in July 1996 faced technological challenges and setbacks. But it is remarkable to think that this basic approach delivered a system that, at its core, remains with us twenty years later. How has the Bank applied the lessons from the building of CREST to the strategic renewal of RTGS?