On May 31, 2021, the Financial Stability Board (FSB) published a consultation document proposing a set of targets to address the challenges identified by the FSB relating to cross-border payments. The consultation document requested feedback on the ability of the targets to achieve desired improvements. The targets relate to cost, speed, access, and transparency for three payment categories (wholesale payments, retail payments, and remittances).
In its comment letter, TCH emphasized that it is very supportive of the overall G-20 effort to enhance cross-border payments and is actively pursuing opportunities to contribute to its success. However, TCH questioned whether global targets of the type proposed in the consultation document will bring about meaningful change. For example, TCH noted there is a lack of clarity as to what each target means, which may result in failure to achieve the desired outcomes. TCH also noted the FSB’s categories do not reflect the classifications used by financial institutions in the U.S. to categorize activity, and suggested that a better approach might be to consider two categories of payments – time critical payments and non-time critical payments measured by the desires of the end users. TCH also offered a number of other comments aimed at improving the FSB’s approach, including that establishing global targets may not incent the desired actions in less developed corridors, particularly absent regulatory changes; and that active engagement not only by the private sector, but also by the public sector, will be critical to achieving the FSB’s desired targets.
To read the full comment letter click here.