Jacqueline Loh: E-payments in Asia – regulating innovation and innovative regulation Keynote address by Ms Jacqueline Loh, Deputy Managing Director of the Monetary Authority of Singapore, at the Central Bank Payments Conference, Singapore, 26 June 2018. * * * Mr Benoît Cœuré – Executive Board Member of the ECB and Chairman of the Committee on Payments and Market Infrastructures (CPMI) Jean-Michel Godeffroy, Chairman of the Central Bank Payments Conference Fellow central bankers and regulators Ladies and gentlemen 1. Good morning. Welcome to Singapore. Thank you for inviting me to speak at the Central Bank Payments Conference. 2. I understand that this is the second conference since the event started in Amsterdam last year, and the first time that the event is being held in Asia. So let me share with you the perspective from this part of the world. A. E-PAYMENTS ARE FLOURISHING IN ASIA 3 . Until about a decade ago, payments were entirely offered by banks. We wrote cheques that were issued by banks and deposited cheques into accounts that we held with banks. As electronic or e-payments flourished, we paid for shopping using debit or credit cards that bore various brands, but were ultimately issued by banks. The banks would then find a way of settling payments among themselves through the Automated Clearing House (ACH) (usually run by the banking industry) and the Real Time Gross Settlement (RTGS) system (run by the central bank). For the longest time, the central bank’s role was clear: We kept payments safe by keeping banks safe.

The ECB also helps to accompany the fundamental change in the financial sector by changing the market structure and infrastructure, e.g. by actively supporting the Legal Entity Identifier (LEI) initiative as well as enforcing financial integration via the Eurosystem’s TARGET2-Securities (T2S) project, which will make cross-border settlement identical to domestic settlement and hence the whole European securities market will become more attractive and cost effective. Financial regulation and transparency I will now expand on this morning’s discussion on “Making markets work: liquidity and regulation”. Apart from central bank and market initiatives, a number of measures in the field of financial regulation, which are intended to prevent another crisis on the scale of the one we have just witnessed, have been decided upon or initiated by various authorities. Such measures contribute to structural changes in the institutional set-up of financial markets and are expected to restore market confidence and, ultimately, to support growth. Yet the intended positive effects of regulatory measures have to be carefully weighed against their costs and unintended side effects. Market participants point out that the regulatory measures must be consistent with one another. The speed of regulatory innovation should not mean that too little consideration is given to the impact one measure will have when taken in conjunction with others. Also, consistency on the international level has to be ensured. Very importantly, financial regulations should be designed and implemented carefully in order to avoid potentially adverse effects on market liquidity and price formation.