supervisory authorities will be able to make a valid assessment of the solvency of troubled institutions quickly enough. as mentioned above, requests for liquidity support may arise very rapidly. the conclusion of this is that it will in practice be very difficult to draw the dividing line between the central bank ’ s responsibilities and those of other authorities by distinguishing between institutions with solvency problems and those with pure liquidity problems, at least during a sudden crisis. another conclusion is that it is crucial to establish rules for information sharing between authorities, especially between the financial supervisory authority and the central bank in advance so that the central bank can quickly make an assessment. it is also important that the central bank, even if it does not have direct supervisory responsibilities, closely monitors general financial market developments, including in the major institutions, to detect potential crisis situations that may call for ela. the traditional view that ela should never be given to insolvent banks can also be discussed from another perspective. a prerequisite for all kinds of support, including ela, should be that there is considerable risk for a systemic crisis. given that, it can be discussed whether it is worse to provide ela to an insolvent institution, or to refrain from an action that could avoid a systemic crisis. if there is a risk of systemic crisis, it is normally determined that public support even to insolvent institutions may be warranted, but this is normally given by the government through the fiscal budget, not by the central bank. the moral hazard aspects, which are common arguments for not providing ela to insolvent institutions, will be no different if the central bank provides support or if the government does. the central bank may have a better capability than other authorities to provide financial support if the need arises very quickly. the main reason for this is that the central bank has the instruments for lending available and it has resources in its balance sheet or the credibility to get resources if they are needed ( for example in foreign currency ). it also has an established capacity to judge whether a systemic crisis may occur as a result of an institution ’ s financial problems. the riksbank is able to make this judgement by virtue of its role as provider of the central payment system and the responsibilities attached to this, its presence in financial markets and its general knowledge of the state of the economic and financial system. other authorities typically have greater obstacles to reacting fast, as they do not in most cases have instruments or resources readily available for these sorts of

##e qua non of every advanced economy. friends, a lot of spade work has to be done before the rtgs system could be introduced. a number of pre - requisites such as the availability of industry - wide communication network, reliable, resilient and state - of - the - art computer platform for the implementation of the systemically important payment system applications including the rtgs system, facilities for electronic based payment and settlement, standardization of message formats for inter and intra bank applications, robust messaging system with facility for security of international standards, proper business process re - engineering by each rtgs participant and last but not the least, facilities for advanced liquidity management, will have to be met, so that the goals of the rtgs system could be realized. a lot of preparatory work, in fact, has already been done. the ibm s / 390 mainframe systems, which include standby facilities to ensure minimal interruption in the availability of services, have been operationalised to serve as the platform for the implementation of the systemically important payment system applications including the rtgs system. the indian financial network ( infinet ) has been operationalised for integrating the entire banking and financial sector. the centralised funds management system ( cfms ) has been operationalised to provide you on - line information on your aggregate funds position, maintained across our offices. under the cfms, fund transfer facilities between the rbi offices will be available shortly. this will help you in efficient deployment of your funds. we have also implemented the structured financial messaging system ( sfms ) on the lines of swift and public key infrastructure ( pki ) to facilitate transmission of messages inter / intra - bank in standardized formats across the banking and financial sector with adequate security. as all of you are aware, our institution for research and development in banking technology ( idrbt ) at hyderabad has become the certifying authority ( ca ) for the banking and financial sector for all the applications implemented over the infinet. the infinet provides for the communication backbone for all the systemically important payment system applications. the disaster recovery site for the systemically important payment system applications has also been set up. all of you will agree with me that this is a project of national importance and therefore, necessary awareness about the proposed rtgs system has to be built up. for the purpose, we have been conducting rtgs awareness programmes for various target groups in the banks such as treasury in - charges, it heads, operations staff,