settlement risk ; indeed, they have had no way of monitoring their exposures to each other during the day. they operated on the presumption that, as long as they exchanged payments only with supervised banks, the central bank would “ sort out ” a settlement problem in the unlikely event that one arose. this is hardly a sound basis on which to proceed - from either a commercial or a public policy viewpoint. it leaves individual banks potentially exposed to large losses which, because of the broader ramifications, tax payers might end up having to cover. to achieve a more satisfactory position, australia is now travelling the path of many other countries in introducing a real - time gross settlement - that is, rtgs - system for interbank payments. under rtgs, high - value payments will be settled continuously across banks ’ accounts with the rba - rather than being accumulated, left hanging overnight and settled up in one hit the following morning. on an average day payments exchanged among banks but not settled until the next day come to over $ 90 billion. rtgs will, at the outset, eliminate about two - thirds of that overnight exposure. it will also give australia a fully - fledged delivery - versuspayment system for transactions in debt securities. with banks and other payments providers, the rba began building the rtgs system in 1995. this has been a major undertaking - with a development cost across the industry of around $ 120 million. the project is technically complex, but its biggest challenges have been reaching agreement on the architecture and rules for a system which all high - value payments providers will use on an equal and open basis. progress has not been rapid, or without occasional friction, but it has been steady. the key components of the system are now falling into place : - last month, the rba ’ s central site - where interbank payments will be processed in real time - became available for testing by the industry ; by early next month, this central site will be fully operational ; by august, the industry ’ s system for delivering payments to the central site using swift messages should be tested and ready to use ; - over subsequent months, high - value interbank payments will be moved progressively onto the new system, although ultimate settlement will, for the time being, still be the following morning. full implementation of rtgs is scheduled for april next year. whether this is achieved now depends largely on the commitment of the industry, especially the major banks. as we get closer to rtgs

can reasonably expect from your counterparty as you transact your fx business. what this means in practice is that the steps different market participants take to align their activities with the principles of the code will necessarily reflect the size, complexity, type and extent of their engagement with the fx market. as i mentioned earlier, the first phase of the code was released in may 2016. it covered areas such as ethics, information sharing, aspects of execution and confirmation and settlement. the second phase covers further aspects of execution including e - trading and platforms, prime brokerage, as well as governance, and risk management and compliance. we have provided market participants with a number of opportunities to comment on the code, in addition to receiving the direct input of the market participants group led by david puth. over the past few months, drafts of the full text of the code have been distributed to market participants for their review, principally through the various fxcs, but also through other industry associations to ensure all perspectives are appropriately reflected in the code. through this process, quite a few thousand comments were received. in my view, the text of the code provides the best and most appropriate guidance we could give, given the sometimes wide range of feedback received, particularly on those small number of issues that are most controversial in the market. the most obvious example of this is ‘ last look ’. this issue has generated considerable passionate discussion. i would expect that discussion to continue after the release of the code in may and that the code might evolve as a function of that discussion. i would like to make the point that if market participants think it would be preferable for the code to have gone further, they are welcome to go down that path in their operations. on the other hand, it would not be desirable for the converse to occur, namely for market participants practices to fall short of the principles described in the code. that said, i think it is a good outcome of the process that we were able to distil the points of contention down to a small number of ( not insignificant ) issues. outside of a small number of contentious areas, the feedback was reflective of a widely held consensus. market participants have recognised the code ’ s aim of helping move the fx market to a better place. i will illustrate that with a couple of the areas that were addressed in the first phase of the code, which is already in the public domain. one example of this is around information sharing, where many market participants highlighted that they are unsure