- up on settlement risk. the longer settlement is delayed due to operating hours the greater the settlement risk becomes. expanding operating hours will make cross - border payments faster and reduce settlement risk but, as the report points out, there are also risks and operational and policy implications to assess when reviewing expansion of operating hours. parties involved in rtgs systems may need to review and enhance existing operational procedures, risk monitoring tools and mitigation measures, and central banks and other authorities, will need to consider issues related to monetary policy, financial stability, and resolution policy for troubled institutions. undertaking the assessments of access and operating hours is critical the reports encourage central banks and authorities to review the benefits, risks and barriers of expanding access and operating hours and set out a framework to do so. the report on access sets out a holistic framework that central banks and authorities can follow and by providing realworld examples and case studies of jurisdictions that have successfully expanded access. and the report on expanding operating hours encourages authorities to assess the three end - states and reviewing the opportunities, risks and policy implications for each of them. while the reports say “ encourage ”, i would really urge central banks to undertake such reviews – the more that change, the greater our ability to meet the fsb global targets. with building blocks 10 and 12 being foundational for the roadmap, undertaking the assessments and taking action to expand access and operating hours will also have a direct positive impact across many building blocks. the bank of england ’ s renewed rtgs service i want to bring this to life by outlining what the bank of england will be doing in response to these two reports and how our rtgs renewal programme will support this work. the bank is in the process of a multi - year project to renew rtgs. while changing our domestic infrastructure, this programme also has an eye to opportunities to enhance cross - border payments. there are two key milestones approaching : chaps payments will migrate to enhanced iso 20022 messaging in april 2023, followed by the switchover of the core settlement engine in spring 2024. the new rtgs platform will have the capability to extend operating hours to 22 / 5, and with further changes, to near 24 / 7 operation. and it will be built with the capacity to accommodate a significant increase in account holders. importantly, it will be a modular design with a strong foundation on which to build additional innovative functionality. we are currently consulting industry on a menu of features which could be introduced to rtgs

lending such as that characterized by a high degree of portfolio diversification, could justify lower capital requirements. the third pillar specifies minimum disclosure requirements on capital adequacy to enhance market discipline. despite its relatively more complex architecture, the implementation of the new framework provides a number of options and flexibility to banking institutions. this is to ensure that the approach adopted reflects and is commensurate with the nature of risk - taking activities and the level of sophistication of individual institutions. in adopting the standardized approach for credit risks, the credit exposures are weighted based on recognized external credit ratings. however, for large banking institutions with businesses which are highly complex, the more advanced approaches, that is, the foundation or advanced internal rating based ( irb ) approach may be more appropriate to reflect their actual risk profile. similarly, there are three alternative approaches that may be adopted in allocating capital for operational risks, that is the basic indicator approach, the standardised approach and the advanced measurement approach. the objective of the new framework is to emphasise on the need for refined measurement of risks, more efficient capital management and the adoption of sound risk management practices that will ultimately contribute to greater financial stability. this will be complemented with efforts to enhance the corporate governance framework, the robustness of the internal control systems, and to introduce greater transparency and market discipline. within the context of these developments is the importance of the ability of the board members and top management of banking institutions to assess risk from a broader perspective and its strategic impact on the institution. in view of the significant implications of this new capital framework, bank negara malaysia has been directly involved in the consultative process through regional forums to ensure that issues and concerns of the emerging markets are considered by the bis in designing the new accord. we are pleased to note that many of these issues have been taken into consideration. motivation for migration to the new accord the adoption of the new accord is consistent with building strong risk management capability. the enhanced risk management practices required by the new accord not only can result in greater capital savings but becomes vital as the domestic banking system becomes increasingly competitive and integrated with the global marketplace. effective and efficient decision making is enhanced with relevant and timely information supported by more quantitative analysis. this can be achieved through having a more robust data architecture and information system, integrated processes and enhanced information flow and reporting. having a robust risk management framework would also allow banking institutions to better assess the marginal contribution of existing as well as new business lines to the institution