routing flexibility for merchants and debit card pricing in several ways. as discussed in more detail below, the statute provides for a minimum number of networks per debit card and establishes the ability of merchants to direct the routing of debit card transactions over those networks. the statute also contains provisions, not subject to implementing rules by the board, that protect the merchant ’ s ability to provide pricing incentives for customers to use different forms of payment. 2 in addition, the statute provides overall limitations on interchange fees through standards to be set by the board. input to the rulemaking. as input to the development of our proposed rule, board staff held numerous meetings with card issuers, networks, merchants, consumer advocates, and others to deepen our understanding of the debit card industry. these discussions provided information about the structure and mechanics of the debit card system, fraud losses and fraud - mitigation activities, and fees and costs associated with debit card transactions. staff also reviewed written submissions by interested parties that highlighted issues to be considered in implementing the statute. 3 to obtain further input, last fall the board surveyed debit card issuers that would be subject to the interchange fee standards, payment card networks, and large merchant acquirers. we requested information about the volume, costs, fees, fraud - prevention activities, and fraud losses associated with different types of debit card transactions. we also asked about the statute prohibits payment card networks from inhibiting merchants from providing a discount or other incentive for any particular form of payment, as long as any discount for card use is clearly disclosed and does not differentiate on the basis of issuer or payment card network. the meeting summaries and written submissions are posted on the board's public website at http : / / www. federalreserve. gov / newsevents / reform _ interchange. htm. bis central bankers ’ speeches network exclusivity arrangements and routing restrictions. the information gathered through these surveys informed our development of the proposed rule. based on this information, we published a proposed rule for public comment in december. the comment period closes next tuesday, february 22. we will carefully review all the comments we receive before we adopt a final rule. let me turn now to the substance of our proposed rule. i will summarize each major statutory requirement, and then describe how the proposed rule implements it, including alternative approaches we considered. prohibition on network exclusivity and routing restrictions. the statute requires the board to prescribe

, our success will be measured by our ability, and the public ’ s confidence in our ability, to conduct business operations effectively on january 3, 2000, and thereafter. current state of international year 2000 some foreign governments and institutions started their year 2000 program years ago, while others were initially reluctant to recognize that a problem even existed. this reluctance hindered efforts to take early action. in some areas, already limited resources were dedicated to other activities, such as the euro currency conversion or attempts to restructure weakened economies. additionally, those countries that recognized the problem early and had sufficient resources assembled technical experts from whatever source was available. recognizing these challenges, in april 1998, the bank for international settlements hosted a year 2000 roundtable to raise international awareness. at the close of the conference, the sponsoring organizations, the basle committee on banking supervision, the committee on – 2 – payment and settlement systems, the international association of insurance supervisors, and the international organization of securities commissions, established the joint year 2000 council. the council was formed as a direct result of the recognition of the complexity of the global financial services industry and the need to communicate proactively with regulatory and supervisory authorities. the group of seven has welcomed and endorsed the establishment of the council and has requested it to develop the necessary initiatives to raise the year 2000 issue to the attention of senior financial regulators. as chairman, i work with other members of the council to ensure that a high level of attention is given to the challenge within the global financial supervisory community and to serve as a point of contact with national and international private sector initiatives. to that end, the council operates with the participation of central banks, insurance and securities regulators, and banking supervisors. it is the first international body that brings together such a range of financial regulators. it is important to note that the joint year 2000 council is not the “ international year 2000 enforcement agency ”. we do not have onsite examiners, nor are we meant to replace the efforts of national regulators. the council established an external consultative committee, or ecc, to enhance the degree of information sharing between the public and private sectors. this committee includes representatives of internationally oriented organizations including the global 2000 coordinating group, the international monetary fund, the world bank, and financial service providers, such as s. w. i. f. t., euroclear and cedel. the council brings together an unprecedented number of regulators and supervisors and, with the input of the ecc, it has developed