Industry engagement was crucial in creating our vision and remains crucial to ensure that the renewed service delivers this, provides what industry needs, and adapts to the fast moving world. We have developed a number of strategic and working level channels that provide input from across the payments industry. These include the Strategic Advisory Forum, which provides input and advice on the strategic direction of CHAPS and RTGS; the Senior Sponsors’ Body, providing strategic insights to the RTGS Renewal agenda; and the joint Bank/Pay.UK Standards Advisory Panel which has provided key expertise on the transition to ISO 20022.7 Membership of these bodies spans current CHAPS direct and indirect participants (old and new) and trade bodies, UK authorities, software vendors and corporate end users. Together these channels allow the voices of the industry and users to be listened to each step of the way. The Vision 8 which was developed in close collaboration with industry, The 2017 RTGS Renewal Blueprint, set out five guiding principles for the renewed RTGS service:  Higher resilience: Resilience to operational and security issues will continue to be at the heart of the new service with best-in-class resilience to withstand, and to recover from, the evolving threat landscape. Broader access: New types of payments system providers have already joined RTGS following our policy changes, and we welcome more. In the short term, as we transition to the new RTGS service, temporarily there will be reduced availability to onboard new participants to RTGS, including to CHAPS, from now until early 2024.

The most significant requirements are expected to fall on the largest FBOs from advanced economies – some of which have also adopted tighter local requirements for foreign banks – and should contribute importantly to a safer and sounder U.S. and international financial system. Correspondent banking relationships have also received heightened attention in the context of serious violations of anti-money laundering and know-your-customer standards by some banks, and substantial fines. It is imperative to firmly deal with illegal, unsafe and unsound banking practices, including money laundering and transactions with U.S.-sanctioned countries. It is also important to be on the look-out for potential unintended consequences and externalities, such as widespread de-risking where correspondent bank access is shut off to compliant counter parties and to legal flows, economic costs are excessively increased, or flows migrate to avenues subject to less oversight or transparency. The scope, scale, and impact of de-risking need to be better understood. Dialogue between market participants and the official sector is ongoing, both multilaterally and bilaterally. Let me conclude. The U.S. economy and financial system have strengthened notably in recent years and in a mutually reinforcing way. U.S. monetary and regulatory policy both need to be tailored to domestic conditions. The Fed is also mindful of the international effects of its policies, given the central place of the U.S. in the global financial system, and the potential for spillbacks to the U.S. economy and financial system. Effective communication with market participants and policymakers is important.