OTTAWA (Reuters) - The Bank of Canada is working with the Department of Finance to develop a new comprehensive framework for the oversight of payment systems, Lawrence Schembri, deputy governor at the central bank, said on Friday.
In the prepared text of a speech in Prince Edward Island to the Canadian Payments Association (CPA), he did not discuss May’s higher-than-expected inflation or monetary policy in general except to reiterate a commitment to a 2 percent inflation target.
He also said the central bank had mentioned the need for more balanced growth through higher exports and business investment, and said an improved payment system could promote trade.
The new oversight framework may give the central bank a larger role by overseeing prominent payments systems, in addition to those that are systemically important. Prominent systems are one step below systemically important and are ones whose failure could still cause significant national disruption.
This could mean subjecting the CPA’s Automated Clearing Settlement System, which exhibits characteristics of a prominent payment system, to Bank of Canada oversight, he added. Currently the Finance Department supervises the CPA.
“The vision for the other national retail payment systems is that they, too, would be subject to oversight that is proportional to risks,” he said. Other systems include the Interac system used at retail outlets; credit card networks; and online payment schemes such as PayPal.
Reporting by Randall Palmer, editing by Alex Paterson