the world remains a risky place, with the financial sector still constituting a major source of fragility. reform processes led by the financial stability board, the g20 and the bank for international settlements are pointing us bis central bankers ’ speeches in the right direction, but progress in implementing these reforms is slow and uneven across major regions of the world. the world has a broad framework to regulate globally - systemic financial institutions but there remain gaps, especially regarding resolution mechanisms when banks fail. a major source of the crisis was the build - up of significant external imbalances. the world has made slow progress in tackling high current account imbalances across the globe, which has spill - over effects on smaller countries. the recent sell - off in emerging markets in response to talk of tapering in the us is an example of how policies in one country, especially one as powerful as the united states, have unintended consequences for other countries. many countries continue to pursue exchange rate policies that distort trade and investment flows. naturally, each country pursues policies that suit its own national circumstances. at times, these policies exacerbate global fragilities rather than contributing to their resolution. the world would benefit from a higher level of coordination and cooperation to limit the spill over effects of domestic interest and exchange rate policies on smaller open economies. the world also needs more robust institutions to reduce the cost of insurance for individual countries as well as to objectively enforce rules and standards, with the aim of reducing future crises. at present, there is a perception that bodies such as the imf apply rules inconsistently, with one set of rules for developing countries and another for advanced economies. south africa, like most other countries, is a member of the imf and it is in our collective interest for this body to be credible, strong and responsive. the paralysis in world trade negotiations has given rise to regional trading blocs and bilateral trade agreements. given the asymmetry in power across the world, such an approach to negotiations is always going to result in a skewed system, biased towards richer countries at the expense of poorer ones. fair and open trade and increased market access for poorer countries to richer ones is essential to reduce the build - up of imbalances. on the african continent, more needs to be done to strengthen the african union. quite a number of countries do not pay their dues, resulting in the organisation being overly dependent on donors. while donations are always welcome,

and risk controls than the net settlement service used by most private clearing arrangements today. finally, as facilitator, we are eager to hear about your efforts, both the successes and the failures, and to learn what consumers think. if we are to make informed decisions on policy and regulatory issues in this rapidly changing environment, we must have a sound understanding of market developments and the implications of policy choices. i do not believe the federal reserve should dictate or promote any specific “ vision ” of the future payments system, particularly with respect to the small - dollar retail payment mechanisms. the marketplace will be the ultimate judge of the future direction of the payments system. we should understand, however, the payment mechanism attributes customers are demanding, and the products and services you are developing to meet that demand, so that we can shape policies in the context of market realities. conclusion in closing, i hope that my discussion has provided some additional insight into the consumer side of electronic banking and its implications for federal reserve policy development. i would like to again extend my personal welcome for your suggestions on how to improve the climate for payments system innovation, and to share with us your experiences with electronic banking. the insights that we obtain from an ongoing dialogue with industry representatives need to be augmented with further research in this area. in this regard, the federal reserve plans to undertake a major research effort in 1999 that will include surveys of consumers, businesses, and depository institutions about the use of retail payments. the surveys will gather data on the use of various retail payment instruments and the use of technology to facilitate retail payments, and will also explore public perceptions about retail payment instruments. we look forward to sharing the results of these surveys with you. they should provide both the federal reserve and the private sector with a much broader base of information from which to evaluate policies and initiatives.