a voluntary agreement with the relevant provider. this would be similar to the approach adopted with american express and paypal. in the event that this were not possible, the bank would discuss with the australian government the best way to address the issue. more broadly, as i discussed above, the current treasury review of the regulatory architecture provides an opportunity to look holistically at this issue and whether the existing legislation and regulatory provisions could be amended to better reflect our modern and dynamic payments ecosystems. conclusion so that is a quick review of some of the issues that the payments system board and the rba staff have been focusing on recently. it is clear that payments is an increasingly exciting area and that significant innovation is occurring. this presents opportunities to deliver improved services to end users of the payments system as well as raising new questions for policymakers. the bank very much appreciates the ongoing engagement we have with the industry as we jointly work towards better outcomes for the australian community. thank you. 6 / 6 bis central bankers'speeches

behave differently when inflation is thought to be a part of the economic furniture. moreover expectations of continuing inflation, once they had developed, proved to be fairly stubborn, which tended to constrain the ability of monetary policy to support the economy when demand was weak. but by the same token, something we observe today is that when expectations are anchored at appropriately low levels, monetary policy has more flexibility. policy makers have room to be a little more tolerant, for example, of a decline in the exchange rate. our own experience in the aftermath of the asian financial crisis from 1997 was that in the face of a pronounced weakening in the exchange rate, inflation expectations remained quite well anchored. while inflation did increase temporarily as a result of the fall in the exchange rate, the likelihood of a persistent problem with inflation was low. hence monetary policy was able to follow a fairly accommodative stance, in the face of a very weak international environment, rather than needing to tighten to safe - guard medium - term price stability. this would not have been possible in earlier times, and the extra flexibility made a considerable difference to economic performance. so expectations matter, and it is not unreasonable to think that the efforts of policy makers to be clear about their goal of controlling inflation, and to act consistently with that goal, made a difference to the characteristics of the inflation process. that in turn has allowed policy some additional short - run flexibility. the question many have recently debated is whether there is now another sea change occurring in the inflation process every bit as profound as that which took place during the 1960s, but in the other direction. that is, is the prevailing problem in future going to be not inflation, but deflation? for my own country the answer is clearly ‘ no ’, for the foreseeable future. others are more qualified to answer for other countries. but either way, here again expectations will be important. while they are strongly held above zero, it will be easier for monetary policy to help get an economy out of an incipient deflation. were expectations of deflation to become entrenched, on the other hand, policy would face a much more difficult task to remedy the situation. this highlights the importance of articulating the goals of policy as clearly as possible, so as to give expectations an anchor. for inflation targeting countries such as australia, stressing the symmetry of the target is quite important in this context. countries such as the us without a formal target have also indicated that there