The forum is designed to encourage active dialogue and deliberations from the different perspectives, notably between the service providers and the users. The dialogue will also serve as a platform to discuss how the industry may effectively operate in the context of the prevailing regulatory environment, policies and practices. From the regulators'perspective, the aim is to develop an enabling environment to facilitate and foster greater use of more efficient payment mechanisms in Malaysia. Ladies and Gentlemen An efficient, reliable and secure electronic payment system is critical to the soundness of the financial system, the efficiency of the financial markets and the economic growth and development process. With the rapid technological advancements and increasing consumer demands for more efficient delivery services, the Malaysian financial landscape has continued to transition towards the increased significance of an electronic payment systems and channels. Despite the progress that has been achieved, Malaysians however, remain high users of currency notes and coins, with the currency-incirculation amounting to about 6.4% of GDP. In contrast, the average ratio for high users of electronic payments such as in the Scandinavian economies is only 2.9%. The use of cheques is also dominant in our financial system, accounting for 96% of the total value of non-cash payment instruments. These indicators suggest that measures to encourage more active use of e-payments would need to go beyond building the electronic payment infrastructure.
Resolution would naturally go hand-inhand with a greater reliance on instruments such as contingent capital. And there would be enormous challenges in resolving global banks that span countries with different legal jurisdictions. Extending resolution procedures to large institutions is a necessary but not sufficient condition for stability of the banking system. 7. More radical reforms  All of these potential reforms would be steps in the right direction. They would all help to put more of the costs of maturity mismatch on the shoulders of those who reap the benefits. But taxes, the Basel capital requirements, special arrangements for systemically important financial institutions and enhanced resolution procedures all have drawbacks and are unlikely to do the job perfectly. So, if we cannot rely solely on these types of measures, are there more fundamental directions in which we could move that would align costs and benefits more effectively? One simple solution, advocated by my colleague David Miles, would be to move to very much higher levels of capital requirements – several orders of magnitude higher. A related proposal is to ensure there are large amounts of contingent capital in a bank’s liability structure. Much more loss-absorbing capital – actual or contingent – can substantially reduce the size of costs that might be borne outside of a financial firm. But unless complete, capital requirements will never be able to guarantee that costs will not spill over elsewhere.