Despite the facilities offered by these money transfer systems, there still remains a significant portion of remittances of un-skilled workers that are not captured by the formal money transfer systems. Enabling regulatory environment An enabling regulatory environment is necessary to enhance cross-border remittance transfers. While recognizing the need to deter money laundering and terrorist financing through cross-border transfers, laws relating to this type of activities should not discourage genuine remittance flows through the banking system. Nor should they be discriminatory or prohibitive to remitters or receivers. Most countries with fully open current and capital accounts have facilitated cross-border transfers than the countries with capital controls. The situation is expected to be improved with the relaxation of exchange controls in both the remittance originating country and the recipient country. There is also a need to monitor and regulate the agencies and other service providers which recruit migrant workers. It is reported that, in some instances, the agencies tend to persuade migrant workers to go for lower wages and salaries or employ them under harsh working conditions. There have also been instances where the agencies or agents take money upfront from workers and have left them in the lurch. Remittances through informal channels According to estimates, still 30–40 percent of remittances are transferred through the informal institutional networks and private channels. In some instances, informal systems do not transfer foreign currency from the origin/host country to the recipient/home country. Arrangements are made to provide funds in local currency at the recipient's end.

But the transitions to a more sustainable equilibrium could also bring greater volatility in asset prices, less stability in macroeconomic outcomes, slower growth and more uncertainty. The strength of the financial system is an important factor in assessing the probabilities associated with, and the potential impact of, the greater volatility that might be associated with these transitions. Where financial systems are strong and resilient, they provide more of a cushion against shocks and help improve the effectiveness of monetary policy in those circumstances. Where they are weaker, they can amplify the impact of shocks on macroeconomic activity and reduce the effectiveness of monetary policy in mitigating shocks. I believe the changes in the U.S. financial system over the past two decades have produced a stronger and more stable system. The large financial institutions at the core of the system have substantial capital cushions and larger and more diversified earnings capacity. These institutions maintain capital above both the regulatory minimums and their internal economic capital measures. The technology and practice of risk management has improved dramatically. All types of risks in financial intermediation are more broadly dispersed. The financial infrastructure is stronger. The combined effect of these changes seems likely to have made the U.S. financial system more stable across a broader range of circumstances. Although a substantial degree of uncertainty surrounds any forward looking judgment about financial resilience, the U.S. financial system seems less vulnerable to specific shocks and better able to absorb larger shocks than was true in the relatively recent past.