The UK is undergoing a consolidation of key retail payment systems under a single New Payments Architecture (NPA), aimed at addressing the lack of a common entry point for access and different on-boarding processes for participants across the different systems. Similarly, Australia launched the New Payment Platform earlier this year, which is seen as a key payments infrastructure for the domestic market. Of significance, these developments share common outcomes – to avoid duplication of industry resources, widen network reach and enable economies of scale. Here in Malaysia, pooling of resources at the infrastructure level has been a longstanding strategy for the payment system. As early as 1997, Malaysia had consolidated its three ATM networks to eliminate fragmentation in that segment. More recently, we saw the formation of PayNet which serves as a shared payment infrastructure to facilitate domestic payments. Of note, PayNet will be launching the Real-time Retail Payments Platform (RPP) next week. This will be supported by a National Addressing Database (NAD) that enables users to pay seamlessly and securely using simple identifiers such as their mobile phone, national registration 4/6  BIS central bankers' speeches  or business registration numbers. At the international level, regulators should also seek to collaborate towards promoting greater harmonisation or centralisation of legal, technical and operational arrangements for payments. These include exploring the adoption of international standards such as the ISO 20022 messaging standard. These standards would enhance compatibility across different infrastructures and pave the way towards greater cross-border interoperability.
But I would make three points in response: First, I would contrast the time taken to agree Basel III and much of the rest of the framework – around 3 years between the start and finish of negotiations – with the best part of 10 years it took to agree its badly flawed predecessor, Basel II. Second, in the light of the transition to the new standards banks in many jurisdictions have already strengthened their capital positions – often it has to be said with some prodding from the supervisors. In the UK, banks are holding £ more capital than prior to the crisis. Globally, there is around $ more capital in the world’s largest banks. Holdings of liquid assets for the major UK banks have trebled and leverage has almost halved. Third, the lengthy transition is designed to ensure that the new standard does not have a procyclical effect, driving banks to deleverage further, to shrink their balance sheets to help meet the new, tougher standards. I should make clear here that I do not buy the argument that if we require banks to hold more capital and liquidity then, inevitably, they will lend less. Indeed, the opposite can be true. As we saw in Japan and see elsewhere, weak banks desperate to do what they can to improve their capital positions – but unwilling to bite the bullet and issue fresh equity – can become zombies of little use to the real economy.