These problems may in turn spread to a number of banks and at worst threaten financial stability. Retail payments consist of many transactions of limited size and retail settlement amounts are normally modest. Normally, problems in the retail payment system will not pose a threat to financial stability. Therefore, more emphasis can be placed on executing retail payments quickly and at reasonable cost. The purpose of the provisions in Chapter 3 of the Act relating to Payment Systems, etc. from 1999 is to contribute to ensuring that systems for payment services are organised and operated in a way that promotes safe and efficient payments and effective and coordinated execution of payment services. This responsibility has been delegated to the Norwegian Banking, Insurance and Securities Commission. The Norwegian Banking, Insurance and Securities Commission and Norges Bank cooperate closely on issues of relevance to the retail payment systems. In accordance with the requirements of the Norges Bank Act, Norges Bank has focused on efficiency in the retail payment system as a whole. In most western countries, the payment system lays claim to between 1 and 3 per cent of GDP. More efficient structures can therefore result in substantial savings and free up resources for other purposes. In Norway, banks use NOK 5.9 billion to produce payment services. Costs to the payer and payee in connection with payment transactions come in addition.
It is up to each country’s central bank to determine which retail payment systems are important and must therefore comply with the six recommendations. The proposal implies that retail payment systems must have a well-founded legal basis. The individual participant should have a clear understanding of the financial risk connected with participation in the system. Further, the retail payment systems should ensure a high degree of safety and operational reliability and should have satisfactory contingency arrangements. The system should also provide efficient and practical payment solutions. The system should have objective and publicly disclosed  8  BIS Review 66/2002  criteria for participation, which permit fair and open access, and the system's governance arrangements should be effective, accountable and transparent. The ECB suggests in addition that the four remaining core principles may be applied to retail payment systems. Of these, the ECB is of the view that the core principle concerning final settlement on the day of value should receive highest priority. Norges Bank has not made a thorough evaluation of the Norwegian retail payment system in relation to the six recommended core principles. Nevertheless, I will present some preliminary assessments of where the Norwegian retail payment system stands in relation to these recommendations. 12. ECB proposal for core principles for retail systems I. The system should have a well founded legal basis under all relevant jurisdictions. II.