##red checks. in developing procedures to implement those provisions, the federal reserve, working with the banking industry, created a means to process returned checks on high speed equipment, which shortened return times by reducing the number of banks that might handle dishonored checks. more recently, in 1994, the board modified regulation cc to implement the same - day settlement rule, which broadened banks ’ ability to present checks to collecting banks directly and receive same - day funds in settlement. direct presentments reduced the role of intermediaries, including the reserve banks, but it improved the efficiency of the payments system. as expected, the volume of checks collected through reserve banks has declined. this summarizes the history of our involvement in payments to date, and the situation on the surface looks quite stable. why, then, is the federal reserve undertaking a fundamental review of its role? there are several reasons. first, as i have noted, the banking industry is in the midst of significant change. these changes are primarily evolutionary - - driven by advances in technology, by industry consolidation, and by regulations that now permit interstate branch banking. they do, however, provide the opportunity for revolutionary responses that may, with time, dramatically alter the face of the payments system. we need to understand and help to beneficially shape these forces. second, from time to time, and certainly in a period of change such as this one, it is appropriate for any organization to reassess its mission and how it fulfills that mission. as you know, the united states remains far more dependent on paper checks for making payments than any other industrialized country, even though electronic transactions appear to be more efficient and less costly. as you also know, the federal reserve is the only institution that presents checks to all depository institutions nationwide. we suspect that industry consolidation and electronic technology may change the impact of our nationwide reach, but exactly how and when that might happen, and what would be appropriate responses, are not clear. careful self - scrutiny is clearly timely. finally, there are significant differences of opinion in the industry, and our society more generally, as to the appropriate payments role of the federal reserve. as a public service entity, the federal reserve should address these concerns. in light of all this, in october 1996, chairman greenspan asked me to serve on a committee that is led by vice chair rivlin to examine the federal reserve ’ s role in the payments system. the committee has been at work all year, and

for instance – which you have time and again heard me say would no longer be a problem of plenty, but be a pot of plenty for the many. in other words, ladies and gentlemen of the bmap, there is so much going on in the banking sector and you are in a position to help your respective banks and our economy benefit from it. nevertheless, i must remind you that even as you get involved in the sometimes complex details of these reforms you must not forget your customers. i mean, the basic requirements of your customers. i remember that i have asked bmap before to take the lead in informing their atm customers of their service fees. sure, there has been compliance, but i wish there would be more active and visible compliance. my other request is for bmap to initiate the posting of the contact details of their high level officers who can receive customer feedback that are often overlooked at the branch level. i hope to see more bank premises with this simple guide. as it is, the bangko sentral continues to receive complaints about bank services. this tells us that some of your customers are not getting the attention they need and they do not know the bank officers they can call or e - mail. again, this is a challenge that i am sure bmap can manage quite effectively. finally, i invite all of you to participate actively in our financial education program. our financial education program targets our key stakeholders, including overseas filipinos and their dependents, students, and the general public. i know that bmap officers have been meeting with our corporate affairs office on how they can support this important advocacy. in particular, a joint program of the bangko sentral and the department of education calls for the incorporation of lessons in saving and money management for all elementary students – from grade i to grade vi – starting this june, for school year 2008 - 2009. i call on all of you, therefore, to help make this a success. you can do this by helping print the materials we have developed to ensure its widespread dissemination. you can also help by developing parallel campaigns that will develop the habit of saving and investing. for your information, we have about 14 million students in the elementary levels, 12. 8 million of whom are in public schools. this is a big and solid critical mass! this also represents a big base of potential customers for your banks. equally important, if we are successful, we shall be on the right path to nurturing a