To prevent a system-wide increase in merchant fees, the Payment Card Reform Framework would moderate the increases in payment card acceptance cost. This would be achieved by subjecting interchange fees to ceilings which are set based on objective and transparent criteria. In addition, the framework also seeks to address distortions in the payment card market in order to foster an efficient, transparent and competitive payment card industry in Malaysia. b. Enhancing the payment card infrastructure  To complement the Payment Card Reform Framework, the banking industry has committed to invest approximately RM1.1 billion over the next 6 years for industry-wide infrastructure development to further enhance the payment card security and expand the Point-Of-Sale terminal network. This would make Malaysia’s payment card landscape more competitive. The infrastructure development that would be undertaken by the industry includes, among others:  2  BIS central bankers’ speeches  •  the expansion of the Point-Of-Sale network by an additional 570,000 Point-Of-Sale terminals, especially among the lower tier merchants;  •  the adoption of Chip and PIN, which is a more secure cardholder verification method for purchase transactions, by 1 January 2017; and  •  the migration of the domestic debit card from its proprietary standard to the internationally-recognised EMV standard equipped with contactless functionality by 1 January 2018. These developments are exciting changes in store for the payments sector. With it, comes an enormous opportunity to expand business and enhance value to consumers.

Sub-prime borrowers defaulted because they were living beyond their means: their stock of debt exceeded their ability to repay. The shattered camels were bank (and shadow bank) balance sheets around the world. Government balance sheets buckled next as they sought to sustain demand and employment. What should financial policy and monetary policy be doing right now? With credit conditions so tight, it has been asked whether the Financial Policy Committee should be employing macroprudential tools to ease regulatory constraints on banks, with the aim of encouraging them to loosen lending conditions, helping recovery and so reducing threats to stability from default risk. The FPC concluded at its September 2011 meeting that such a step would in fact be counterproductive, endangering stability and jeopardizing recovery. Given their precarious starting position when the crisis broke, the capital adequacy of UK banks is still being rebuilt. Worse still, the lingering threat of a severe crisis in the euro area leaves banks operating in an extraordinarily risky environment. While in other circumstances it might have been possible to relax capital requirements if the worst had passed, it is not a sensible course when the worst might still lie ahead. In current circumstances, gradually building resilience through retained earnings is best for stability and recovery, because it helps preserve the capacity to lend “the day after tomorrow”. This leaves monetary policy with its classic role of underpinning demand. Here and elsewhere, central banks have injected extraordinary monetary stimulus.