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Payments System Board Update: May 2020 Meeting

Summary:
At its meeting today, the Payments System Board discussed a number of issues, including: The implications of the COVID-19 pandemic for risk management by financial market infrastructures (FMIs). Members considered that FMIs in Australia had generally performed well in light of the operational and financial risk management challenges presented by the pandemic. The lessons learned from this experience will be discussed in the Bank's 2020 assessments of FMIs. The impact of the COVID-19 pandemic on the retail payments system. Members considered that retail payments providers have, to date, coped well with the altered operational arrangements and other changes induced by the pandemic. The Board will continue to monitor changes in payment behaviour

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At its meeting today, the Payments System Board discussed a number of issues, including:

  • The implications of the COVID-19 pandemic for risk management by financial market infrastructures (FMIs). Members considered that FMIs in Australia had generally performed well in light of the operational and financial risk management challenges presented by the pandemic. The lessons learned from this experience will be discussed in the Bank's 2020 assessments of FMIs.
  • The impact of the COVID-19 pandemic on the retail payments system. Members considered that retail payments providers have, to date, coped well with the altered operational arrangements and other changes induced by the pandemic. The Board will continue to monitor changes in payment behaviour induced by the virus, including the reduced use of cash, and whether there are any policy implications.
  • NPP Australia's recent update on its capability development roadmap for the New Payments Platform. The Board welcomed the progress by NPPA and its participants over the past six months, despite the difficulties associated with COVID-19, and looks forward to further progress towards the delivery of the roadmap over the coming months.
  • The Review of Retail Payments Regulation. While the Review is currently on hold, members asked the staff to continue work on some issues that do not require significant interaction with the payments industry for the time being. The Bank expects that consultation with stakeholders could resume towards the end of the year, with the aim of completing the Review in 2021.
  • ASX's project to replace the CHESS clearing and settlement system for cash equities. Members discussed the delay to the project and endorsed ASX's proposal to consult with stakeholders on a revised timeline.
  • The Bank's assessment of Australia's real-time gross settlement system – the Reserve Bank Information and Transfer System (RITS) – against the relevant international standards. The Bank will publish this assessment in coming weeks.
Reserve Bank Australia
The Reserve Bank of Australia (RBA) came into being on 14 January 1960 as Australia's central bank and banknote issuing authority, when the Reserve Bank Act 1959 removed the central banking functions from the Commonwealth Bank. The bank has the responsibility of providing services to the Government of Australia in addition to also providing services to other central banks and official institutions. It currently consists of the Payments System Board, which governs the payments system policy of the bank, and the Reserve Bank Board, which governs all other monetary and banking policies of the bank.

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