11  Mervyn King, the former governor of the Bank of England, has used a closely-related means of illustrating why monetary policy should give consideration to financial imbalances, where he instead uses the so-called Taylor curve – a curve that illustrates a central bank’s trade-off between stabilising inflation around an inflation target and stabilising the real economy (GDP, unemployment, employment and so on) around a long-run sustainable level. See King (2012). 12  This reasoning is thus based on the notion that risks linked to financial imbalances can be taken into consideration in monetary policy by incorporating their effects in the longer-run forecasts for inflation and the real economy (for instance, measured in terms of GDP). There are also arguments in favour of the central bank having the stabilisation of financial imbalances as an explicit objective for monetary policy. The financial frictions that give rise to the imbalances could, for instance, entail welfare costs for society, over and above the effects on inflation and GDP, which the central bank may have reason to counteract directly, see for instance, Cúrdia and Woodford (2009). Monetary policy would then have three factors to weigh against one another: stabilisation of inflation around the target, stabilisation of GDP around a sustainable level and stabilisation of some relevant measure of financial imbalances. Regardless of the theoretical argument, this way of including financial imbalances in the deliberations could have practical benefits, for instance by reducing the need to incorporate the risks in the forecasts for inflation and GDP.
As set out in the Financial Stability Board's (FSB) latest progress reportOpens in a new window in October 2022, much progress has already been made including: agreeing global quantitative targetsOpens in a new window and a methodology for measuring progress towards them, undertaking stocktakes and analyses of existing payment systems and arrangements, and publishing proposals and best practice for achieving progress. And there have already been tangible changes, for example the move by SWIFT and some key systems to ISO 20022Opens in a new window messaging standards, increased operating hours and the launch of interlinking arrangements such as between Thailand's PromptPay and Singapore's PayNow. Now the work is at an inflection point: many of the original roadmap actions have been completed, providing a solid foundation from which to make real changes to the crossborder payments experience. In February 2023 the FSB published a set of priority actions that will be taken forward to meet the cross-border payments targets by 2027. The actions are grouped in three priority focus areasOpens in a new window: Payment system interoperability and extension; Legal, regulatory and supervisory frameworks; and Cross-border data exchange and message standards. We need to work together to make payments faster, cheaper, more accessible, and more transparent. Some of this work needs to continue to be international for example, agreeing approaches to harmonising rules and standards.