always true, particularly in developing countries with high rate of financial illiteracy and where payment systems are still evolving. in the indian context, it is the regulator that often takes various initiatives to develop the payment systems and sometime even the products. hence, they, at times, put a cap on the price of services to ensure that consumers use the payment services offered through various delivery channels to the maximum extent. for example recently in india reserve bank of india has reduced merchant discount rate for use of debit cards to promote card based transactions which have not taken off in a big way although the number of cards issued is significant. regulators have also to ensure that service providers, particularly non - banks, remain healthy and robust so that they can deepen the payment system infrastructure. consumers expect access to the payment systems that provides timely services to them ( principle 18 of the pfmi ). therefore, a balance has to be achieved between timely service and fees charged by the service provider. technologies and shared infrastructure are to be encouraged to minimize cost and ensure timely services due to economy of scale. the third bis central bankers ’ speeches factor of efficiency is assurance. all the stakeholders should have assurance in using the retail payments system. the retail payment system should have inbuilt capability to protect consumers ’ interest, particularly in the electronic payment environment. the endeavors should be towards designing fraud proof systems and reliable compensation mechanisms that will boost confidence of all the stakeholders. strategy regulators of retail payment systems should put in place a short, medium and a long term strategy with a transparent manner ( principles 23 & 24 of the pfmi ). it helps all the stake holders to prepare themselves in advance without any surprise. reserve bank of india, for example, has to come out with a strategy paper in the form of payment systems vision document for 2012 – 15 describing all its plans for the next three years. a major focus area of the vision document is retail payments. the thrust of the vision is to proactively encourage electronic payment systems for ushering in a less - cash society in india and ensure payment and settlement systems in the country are safe, efficient, interoperable, authorised, accessible, inclusive and compliant with international standards. reserve bank of india had consulted all stake holders before finalizing the vision document so that they are on board during the critical phase of implementation. i am happy to share with you that such a strategy has enabled us to take many initiatives along with all the stakeholders. the strategy should include sensit

alan bollard : everyone needs to play their part – inflation and recession in the new zealand economy speech by dr alan bollard, governor of the reserve bank of new zealand, to the wellington chamber of commerce, wellington, 10 december 2008. * * * the world economy faces some significant challenges. finance markets have been going through turmoil, the pace of global expansion has slowed abruptly, and policymakers have focused on preventing a more pronounced slowdown. for some commentators, concerns over inflation appear to have taken a back seat, for now at least. as the global economy has weakened, commodity prices have fallen, substantially in some cases. many commentators are of the view that lower commodity prices and weak economic activity will drive inflation significantly lower. it is worth remembering that for the moment, however, inflation rates in new zealand ( and many of our trading partners ) remain very high. in the september 2008 year cpi inflation reached 5. 1 percent, the highest rate since 1990. the higher rates of inflation are broadbased. these reflect some common drivers : • a strong run - up in world commodity prices, which have had a direct inflationary impact. oil prices increased nearly tenfold in usd terms in the decade to july 2008, with global food prices also rising strongly. prices of the milk, cheese and eggs category rose 18 percent over the last year. • the long - running expansion in domestic demand contributed to a build - up of pressures on capacity and high rates of domestically generated inflation. so far, weaker demand conditions have been slow to feed through into lower domestic inflation. in the building industry for example, rising prices for raw materials and strong wage inflation have continued to underpin high rates of construction cost inflation. • there have also been sizeable price increases in areas not directly exposed to a high degree of competition over the past few years. increases in local authority rates have run well in advance of overall cpi inflation for a number of years. cost increases in some utilities have also been notable, particularly electricity. • in the banking sector, the cost of international funding has risen significantly and become less assured. however, since july the reserve bank has cut the official cash rate by 3. 25 percent. short term mortgage rates have been cut, but not by this much. banks should not expect to be able to maintain high profit margins in the current environment. table 1 consumer price inflation over the 3 years to 2008q3 cpi component average annual rate for the 3 years to september 2008 quarter annual percent