burkhard balz : overcoming the remaining hurdles in cross - border payments speech by mr burkhard balz, member of the executive board of the deutsche bundesbank, at the global payments summit, cape town, 29 june 2023. * * * check against delivery 1 introduction ladies and gentlemen, distinguished guests, i am delighted to be able to speak to you today about the future of cross - border payments in a town that has played such an important role in cross - border trade throughout its entire history. due to its location at the centre of the trade routes between east and west, cape town has always been at the heart of international trade, right between the atlantic and indian oceans. although trade was significantly slower during the age of sail, when cape town rose to prominence, there was already a need for payments spanning multiple countries and multiple currencies. this is a problem that we still face today, but on a significantly larger scale, because digitalisation, automation and globalisation have made trade faster, more complex, and more global. despite recent geopolitical tensions, global trade and migration are still on the rise. i hope that these trends will not reverse, since fragmentation means a loss of wealth. however, globalisation has put the spotlight on some of the inefficiencies that still affect cross - border payments. compared to domestic payments, cross - border payments remain slower, more opaque, and comparatively expensive. improving cross - border payments on a global scale may seem like an unsurmountable challenge right now, but, to quote the great nelson mandela : " it always seems impossible until it's done. " 2 striving to improve cross - border payments in light of the increasing importance of cross - border payments for the global economy, these inefficiencies prompted the g20 to launch an initiative to enhance this type of payment. as a result of this initiative, a roadmap1 consisting of 19 building blocks with concrete action points was set out in 2020. since then, work has progressed to a point where it is now concentrated on three priority actions. first, regulators around the world have to find ways to harmonise legal, regulatory, and supervisory frameworks. a greater degree of regulatory harmonisation may help to 1 / 4 bis - central bankers'speeches automate cross - border payments further, leading to higher processing speed, and could lower the costs for compliance, which make up a large portion of the costs for these payments.

the effectiveness of our toolbox lies in our ability to discern the most appropriate tool for each situation – every challenge may demand a tailored response to navigate the complexities of the financial landscape. just as a skilled craftsperson carefully selects tools for each task, we must approach our financial challenges with equal care. let me conclude my speech by going back to our clint eastwood film and its closing scenes – please excuse the spoiler : the young man inherits the grumpy man's beloved car, a ford gran torino, but only under the condition that he takes good care of it and does not mess it up with extravagant modifications. we also have the responsibility of taking good care of our clearing system, our " gran torino ". with this in mind, let me wish you safe travels through the evolving landscape of financial markets. thank you very much for your attention. 1 financial resources and tools for central counterparty resolution : consultation report - financial stability board ( fsb. org ) 2 a vice grip, a roll of duct tape, and a lubricant spray ( wd - 40 ). 4 / 5 bis - central bankers'speeches 3 transparency and responsiveness of initial margin in centrally cleared markets : review and policy proposals ( bis. org ) and streamlining variation margin in centrally cleared markets – examples of effective practices ( bis. org ). 4 as pointed out for instance in the bcbs - cpmi - iosco 2022 report on margin practices / / report on margins : review of margining practices ( bis. org ) and the 2024 report on " transparency and responsiveness of initial margin in centrally cleared markets : review and policy proposals ( bis. org ) " 5 / 5 bis - central bankers'speeches