michael s barr : the federal reserve's role in supporting responsible innovation speech by mr michael s barr, vice chair for supervision of the board of governors of the federal reserve system, at the federal reserve bank of philadelphia seventh annual fintech conference, philadelphia, pennsylvania, 8 september 2023. * * * thank you for the opportunity to speak today, in the midst of a wave of innovation in the payments system. there are a range of important players in the payments system and the federal reserve has important roles as a supervisor as well as a payments operator. regardless of who is providing the service, our payments system needs to meet fundamental principles. among those core principles is ensuring that the payments infrastructure supports broad access and promotes financial inclusion. payments are essential for everyday life, and too often, low - and moderate - income households and small businesses don't have access to the payments services they need at a reasonable cost. moreover, as the payments system evolves, it needs to provide strong consumer protections. the payments system needs to welcome competition, provide consumers with choices, and support innovation. the payments system should empower consumers to have better control over their financial lives, including their identity and financial data. and more broadly, our payments system should promote efficiency, convenience, speed, low cost, resiliency, privacy, and security. finally, our payments system must and does rely on trust, and this trust must be maintained as the system is updated. this includes trust that the payments system is not used for illicit purposes, that lawful payments will always be honored, and that neither the government nor private actors will act improperly based on use of the payments infrastructure. not that long ago, the federal reserve was facilitating payments by moving bundles of checks around the country on trucks and trains! and we still have important work to do to ensure that those who rely on checks can get their funds in a timely way and that the system is not exposed to fraud. but more recently the focus has been on improving our electronic payments infrastructure. the fed has long operated the fedwire funds service, used by banks to conduct large - value, same - day transactions among themselves. in addition, the automated clearinghouse ( ach ) service supports batch payments of more modest value. while the fedwire funds service and ach transactions have served the economy well for decades, the economy has changed dramatically over that time. there is a demand for faster payments, and the fed has recognized that today's households and businesses would

. in conclusion, i want to applaud the federal reserve bank of philadelphia for supporting the stakeholders coming together at these conferences, giving us opportunities to learn from each other as we engage in this important work. 1 board of governors of the federal reserve system, " federal reserve board provides additional information on its program to supervise novel activities in the banks it oversees, " press release, august 8, 2023. 2 board of governors, " federal reserve board provides additional information on its program. " 3 this requirement is consistent with the supervisory nonobjection requirement applicable to national banks pursuant to interpretive letters issued by the office of the comptroller of the currency. ( see occ interpretive letter no. 1174 ( january 4, 2021 ) and occ interpretive letter no. 1179 ( november 18, 2021 ). ) 4 / 4 bis - central bankers'speeches