Malaysia has an online bill payments model where merchants need to maintain multiple banking relationships in order to receive bill payments from customers who bank with different banks. Merchants, especially SMEs, find it difficult and costly to maintain multiple banking relationships. As a result, only about 1,000 merchants are currently registered to accept online bill payments via the individual banks’ proprietary bill payments system. Therefore, there is still tremendous potential for greater efficiency and cost savings through the consolidation and expansion of the online bill payments market in Malaysia. Enhancing the efficiency, accessibility and convenience of online bill payment via JomPAY JomPAY addresses the limitations of the current bank-centric model by establishing an open electronic bill payments platform which leverages on the combined infrastructure and network of the entire banking industry. With JomPAY, merchants only need to maintain a banking relationship with one bank, in order to receive bill payments from customers of all other banks. Likewise, customers only need to maintain an account with one bank in order to make bill payments to the entire network of merchants registered with JomPAY. The JomPAY model thus reduces duplication and facilitates the pooling of resources from the entire banking industry. This in turn will enable us to build a wider and more efficient network for online bill payments. Businesses should leverage on JomPAY to accept online bill payments from their customers. Handling cash and cheques is very costly.
If the financial system can be made more resilient, it will be better positioned to withstand the failure of a large and complex firm and continue to provide essential financial services to the real economy. I would highlight three areas of work that are critical to solving the TBTF problem. First, regulators and supervisors are pushing for changes in wholesale funding markets, a source of particular vulnerability during the crisis. This includes reforms to tri-party repo, which are underway, and necessary reforms to the money market mutual fund industry, which are being evaluated by the Securities and Exchange Commission (SEC) and the Financial Stability Oversight Council. Second, the financial market infrastructures are being strengthened to make them more robust to the failure of individual firms. The Committee on Payments and Settlement Systems and the International Organization of Securities Commissions (IOSCO) have published a set of standards for financial market infrastructures called “Principles for Financial Market Infrastructures” that will serve as minimum standards globally. 7  The FDIC’s “single point of entry” framework for implementing this authority envisages establishing a bridge company into which all the operating subsidiaries of the parent company would be transferred. The bridge company would be recapitalized by converting all or some of the parent company’s subordinated and senior unsecured debt into fresh equity in the bridge company. The parent company would be allowed to fail.