asked it to undertake, as a priority, studies in relation to account portability and the ownership of payment systems – whether partial or full divestment by banks would address market failures in competition or innovation. as with all situations where there are two regulators for a single activity, effective coordination will be required. this is recognised in the clauses put before parliament which ensure “ the bank of england will retain effective rights of veto over anything the regulator might do impacting upon [ its stability objectives ] ” 3. this recognises that the integrity of the payments system has to be the first priority, but, most of the time, integrity and the important competition and innovation objectives will align without difficulty. for example, increasing direct membership of chaps improves integrity in terms of mitigating liquidity, credit and operational risks, while also enabling greater competition in the market. and similarly pre - paragraph 2. 22 of the hm treasury response to the “ opening up uk payments ” consultation, https : / / www. gov. uk / government / uploads / system / uploads / attachment _ data / file / 249085 / pu1563 _ opening _ up _ uk _ payments _ government _ response. pdf. this is clause 85 in the financial services ( banking reform ) bill, http : / / www. publications. parliament. uk / pa / bills / lbill / 2013 – 2014 / 0054 / 14054. pdf. bis central bankers ’ speeches funding in retail systems improves integrity as members do not have to take on defaulters ’ liquidity obligations, and also removes a potential barrier to entry. but more fundamentally, to be successful, we and the new payments regulator will need to extend the cooperative working relationship we already enjoy in other areas to payment matters. let me stop at this point : i have tried to draw out some of the idiosyncrasies of the payments environment in the uk and the highlights of our recent and prospective work to protect the resilience of our core sterling payment systems. hopefully there have been some relevant crossovers to the canadian context, which are helpful for today ’ s deliberations. bis central bankers ’ speeches

chris salmon : the uk payments landscape remarks by mr chris salmon, executive director for banking services and chief cashier of the bank of england, at the c d howe institute special policy conference “ canadian payment systems ”, toronto, 4 november 2013. * * * i would like to thank nicholas constantine, andrew dent, rosey jeffery, simon rickenbach and peter williams for their comments and contributions. introduction today ’ s conference provides an opportunity to review how the canadian payments landscape could evolve. on the basis that there will be some relevant crossovers, perhaps the most helpful contribution i can make is to summarise some of the challenges we face in the united kingdom. in line with this session ’ s focus, i will cover the core sterling payments infrastructure, defined as the key wholesale and retail payment schemes that the bank oversees, and focus on integrity, which is at the heart of a central bank ’ s interest in payments. as a precursor it may be helpful to give a brief overview of the current set - up of the uk ’ s payments landscape. the bank of england operates the uk ’ s real time gross settlement infrastructure, rtgs. chaps, our high value payment system, has settled on a real time gross basis since 1996, and crest, our securities settlement system, since 2001. they settle in central bank money across accounts their members hold in rtgs. while high value payment systems ( hvps ) in many countries are owned and operated by the central bank, chaps is run by “ chaps co, ” a non - profit - making, private company owned by its members. its role includes setting system rules, monitoring compliance and administrating membership. the bank of england was given statutory oversight responsibilities in the banking act of 2009 and chaps co are formally overseen on this basis. to reiterate, in the uk, although the bank of england owns and runs the rtgs infrastructure, chaps co is responsible for the provision of chaps. there is a parallel with canada here, where the hvps ( “ lvts ” ) is managed by the canadian payments association ( cpa ) instead of the bank of canada. this parallel is limited though as the cpa both manages and also runs the infrastructure behind lvts. there are also a number of privately - operated retail payment systems in the uk which settle across rtgs accounts on a deferred net basis. these include bacs, which handles direct debits and credits