The Payments System Board (PSB) has been established as part of the Government’s financial sector reform program. The PSB will operate as a policy making Board of the Reserve Bank of Australia (RBA) with equal status to the RBA Board. It will have responsibility for the RBA’s payments system policy with a view to increasing contestability, efficiency and stability in the Australian payments system.

The payments system covers the array of payment instruments (cash, cheques, smart cards among others), their delivery, the exchange or clearance of payment messages, and the final settlement of value between intermediaries providing payment services. The payments infrastructure in Australia includes both private systems like the Bank Interchange and Transfer System and Austraclear, and public systems like the Real Time Gross Settlement system.

The RBA Board will continue to have responsibility for monetary and banking policy.

The establishment of the PSB will substantially increase the accountability of the RBA in relation to its role in the payments system. The RBA has also been given new powers to regulate the payments system under the Payment Systems (Regulation) Act 1998 and the Payment Systems and Netting Act 1998.

As a result of the creation of the PSB, the Australian Payments System Council (APSC) has been wound-up. The APSC was established in 1984 to monitor the operation of the payments system on behalf of the Treasurer. More recently, it has also had responsibility for monitoring compliance to the codes of conduct for banks, building societies and credit unions.

The Council has played an important role in the financial sector reform process, and I would like to express the Government’s appreciation for its efforts over the years.

The Council’s role in relation to codes of conduct and consumer issues transfers to the Australian Securities and Investments Commission, while its payments system role transfers to the PSB.

Today, I am pleased to announce that the Governor-General has agreed to appoint Mr John Thom, Ms Susan McCarthy and Mr Joseph Gersh to the PSB, each for a term of five years. Curricula vitae for the new members are attached.

The Chairman of the PSB is Mr Ian Macfarlane, Governor of the RBA and the Deputy Chair is Dr John Laker, RBA Assistant Governor. Mr Graeme Thompson, CEO of the Australian Prudential Regulation Authority is also a member of the PSB.

Two vacancies remain on the PSB. The Government expects to be in a position to announce further appointments to the PSB in the near future.

:

Dr John F. Laker (Reserve Bank of Australia)   (02) 9551 8510

Mr Ray Jones (Commonwealth Treasury)   (02) 6263 3849

15 July 1998