/ 8 bis - central bankers'speeches as mentioned, the efficiency of an economy is improved when its payment systems allow for smooth and frictionless transactions : from their origin until their settlement. this is valid for persons buying a coffee, a car or a house, for a company issuing a bond or a foreign investor buying stocks in the country. because payment systems encompass many participants, processes and rules that interact with each other, they create complex arrangements that need to address several risks, such as legal, operational, credit, and liquidity. to understand how this works, let me briefly explain the interactions between the participants in the payment ecosystem. there are two main streams of payments in the economy. the first one, known as retail payments, refers to the large volume of transactions, but low value payments, and it occurs between households and businesses. it is linked to the purchase of goods and services, which involves different payment instruments and payment service providers. the second one refers to the financial market wholesale payments and settlement, with a low volume of operations, but large value activity and it occurs between financial and corporate institutions, which includes interbank payments as well as the payments that settle financial market activity. these payments are originated in operations carried out in the financial markets, such as the purchase of shares, bonds and other instruments, which involves multiple service providers, trading marketplaces and market infrastructures. each of these payment streams opens a range of different market participants, which ultimately trigger payment processing through the different financial market infrastructures, such as retail payment clearinghouse in the case of retail payments, and for financial market operations it involves securities settlement system and central counterparties among others. nevertheless, at the core of the payment system is the real time gross settlement system managed by the central bank, where most payments are finally settled. continuing with the analogy of the plumbing system, in recent years, the central bank of chile and the private sector have been busy cleaning, maintaining, and updating the " plumbing " of the payment system whenever necessary, in accordance with innovation and markets'evolution and the best international practices. this has been done through legal and regulatory developments ; private sector initiatives, and the direct intervention of the central bank following a rationale of providing public goods for the real time gross settlement system ( rtgs ). 2. a strong, efficient, and deep financial market requires a robust and diverse financial market infrastructures network. the retail and financial market transactions require a sound set of rules and institutions to support the

) or other equivalent settlement system with an international scope. particularly, the regulatory changes necessary to facilitate cls, are related with the tax reporting regime of the correspondent accounts in pesos, for the settlement of pesos by non - residents. an adequate implementation of this regulation, by our servicio de impuestos internos ( irs office ), aligned with international best practices, would be necessary to the objectives of financial integration. 3. making progress in the deepening and robustness of the repo market entails benefits for the proper functioning of the financial market. let me say something about the repo market, where there is still work to do to improve some remaining aspects required to deepen and diversify it. a deepen repo market involves benefits for the proper functioning of financial markets : ( i ) acts as a low - cost short - term financing alternative, facilitating access through the use of low - risk securities as collateral ; ( ii ) allows participants to diversify their financing sources ; and ( iii ) contributes to reducing volatility in the financial market. an active, functional repo market with a diversity of participants allows the financial market to be strengthened against liquidity shocks. it allows the financial institutions, particularly the non - banking ones, to have access to liquidity from the market and reduce dependence on the central bank. this is even more important in moments of financial stress, where it represents the first layer of liquidity provision to the market,, enabling a more efficient allocation of resources among market agents. 4 / 8 bis - central bankers'speeches now the legislation supports the creation and recognition of repo contracts between market participants, providing legal certainty in case of default, specifically about the treatment of collateral and netting of positions. during this year, we will issue the regulation required for the recognition of local and international master repo agreements, and the financial supervisor has also announced changes to the prudential regulation applicable to these instruments. we strongly expect that these changes, together with initiatives developed by private sector could contribute to the development of an active and more diversified repo market. 4. for the central bank of chile, the availability of different means of payments and smooth functioning of retail payments is paramount. as i said, another important part of the payment system is related to retail payments. in other words, payments services provided to the real sector or to persons and businesses. most of past and current activities of the central bank can be linked to improves about its proper functioning