The engagement of private investors is thus essential for the resolution of payment imbalances in crises… the official sector needs to avoid creating expectations that private creditors and investors will be protected from losses or that official resources would be used to finance large, sustained capital outflows. … We underscore the need for further progress". The opponents of this approach raise two important questions. First, is it possible to define limits on IMF lending? Second, is it acceptable for the official sector to countenance default by a sovereign borrower when the consequences for both the country and the international financial system could be devastating? I shall try to provide answers to both of these questions. It is true that recent crises have been the result of developments in the capital account rather than the current account. As capital flows have grown, so too have the potential demands on the official community as they attempt to fill capital account financing gaps. That is why so many more programmes have involved "exceptional" access in relation to quota. So perhaps, in a world of capital account crises, exceptional access should become the norm? This argument is superficially quite attractive. But its implications need to be assessed carefully. It would mean that IMF resources would need to increase in line with private capital flows even for the IMF to maintain its current role. And since 1970, capital flows have grown around four times as fast as world incomes.
There are two key milestones approaching: CHAPS payments will migrate to enhanced ISO 20022 messaging in April 2023, followed by the switchover of the core settlement engine in Spring 2024. The new RTGS platform will have the capability to extend operating hours to 22/5, and with further changes, to near 24/7 operation. And it will be built with the capacity to accommodate a significant increase in account holders. Importantly, it will be a modular design with a strong foundation on which to build additional innovative functionality. We are currently consulting industry on a menu of features which could be introduced to RTGS beyond 2024. [19] This includes assessing demand for a number of features, including synchronised payments that seek to bring not only domestic benefits, but help to improve crossborder payments. The consultation closes on 30 June 2022 and we expect to issue a response document around the end of this year. In 2017, the Bank became one of the first central banks to expand access to non-bank PSPs. But we want to keep pace with the fast changing payments landscape. By spring 2023 line with roadmap timelines, we plan to review access arrangements by conducting a gap analysis to understand if we have expanded access to the three key groups identified in the report, and consider if we can do more to expand access. And to a similar timeline we plan to undertake operational, risk and policy analysis to arrive on a way forward on operating hours.