YouSaid · the spoken record

Michael Barr

lines on the record: 51
first: 2023-11-17
most recent: 2023-11-17
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“So what I give you a technical answer and then maybe a broader answer. So we really are mostly working on the demand side of the house, if you will, and that elasticities of demand are faster and larger than the elasticities of supply. So what we're really seeing is overall the country has not had enough housing supply for a long time. We've been behind. That was true before the rate hikes. It was true before the pandemic. It's been true for a while. So we do need just overall in our society to see more housing supply come in in order to catch up. But right now the major effect, the shortest term effect is really on tamping down aggregate demand so that supply has a chance to catch up. And I think there is evidence that we were talking about. Met before in the data that supply and demand are coming into better balance overall.”
2023-11-17 · Odd Lots · The Fed's Michael Barr on Real-Time Payments and the Basel Endgame · IDENTIFIED FROM THE TRANSCRIPT · source
“Let me just say, I very much value the diversity that we have in the United States of different kinds of institutions. We have community banks that are very, very local. We have smaller regional banks. We have large banks that are not the GSIBs. We have very large banks that are super complex and serve different kinds of markets. I think that that diversity in our financial system is actually really healthy. It makes for a stronger, more vibrant economy. It makes our banking system more resilient to shock. And so I do think that we do take into account, and I do think that it's important for us to take into account that diversity of size and type of institution.”
2023-11-17 · Odd Lots · The Fed's Michael Barr on Real-Time Payments and the Basel Endgame · IDENTIFIED FROM THE TRANSCRIPT · source
“Assigned us a very particular role with respect to debit cards. Congress has said that we need to determine that debit card interchange fees are reasonable and proportional in relation to certain specified costs. That's our job. We do the job Congress has assigned us. We recently issued a proposal to update the rules in that space. And I don't see that influencing or connecting in any way with our work on FedNow.”
2023-11-17 · Odd Lots · The Fed's Michael Barr on Real-Time Payments and the Basel Endgame · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, no, look, first of all, on the second point, we talked about this briefly before. I do think that there are revenues in the banking system like overdraft fees and insufficient fund fees that some banks have gotten used to. Many banks now are getting out of that business entirely. They've announced that they're not going to do overdrafts anymore. They're not going to charge for them. I think that's positive for our economy and for consumers. Overdraft fees are often really hard for consumers to avoid. And so if we can get rid of them because banks are deciding that that's not the business they want to be in, I think that's a net positive for households and the like. With respect to the existing payment system, I don't see a conflict between the work that we're doing on debit cards and the work that we're doing on Fed now. Congress has”
2023-11-17 · Odd Lots · The Fed's Michael Barr on Real-Time Payments and the Basel Endgame · IDENTIFIED FROM THE TRANSCRIPT · source
“Let me just say, first of all, I think that we have to be very careful with stablecoins. Stablecoins are a form of private money, and we've seen throughout really history that private money, if it's not well regulated, can be extremely explosive. People come to rely on it in the case of a stablecoin linked to the dollar, stablecoins are really borrowing the trust of the Federal Reserve. And if that's the case, we need strong federal oversight of stablecoins. We need oversight of the issuers and the wallets. We need to make sure that there's strong enforcement, there's strong rules of the road, because they can be quite explosive. And so I do think we have to be really careful in the stablecoin space. I think that, you know, innovation is hard to predict. It's hard to say that a particular technology is the one that's going to be the next technology of the future. I think...”
2023-11-17 · Odd Lots · The Fed's Michael Barr on Real-Time Payments and the Basel Endgame · IDENTIFIED FROM THE TRANSCRIPT · source
“These new technologies, but to do that in a way that is safe and sound, that complies with consumer protection laws, that doesn't expose the banking system to threats from illicit finance, terrorist financing, money laundering, all those issues really need to be completely buttoned down. And this supervisory program will help provide that kind of clarity.”
2023-11-17 · Odd Lots · The Fed's Michael Barr on Real-Time Payments and the Basel Endgame · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, let me just say that in general, the banking system is not deeply exposed to issues in the crypto space. Most banks have been taking what I would describe as careful and cautious approach to crypto. We have been paying attention to these issues very much since I arrived at the board. We've established a novel activities supervisory program to bring experts from around the Federal Reserve System together to help supervisors deal with issues at banks that are engaging in some crypto-related activity. And that novel activities supervisory program should help us wrap our arms around the issues, should provide greater clarity and guardrails to banks that want to be involved in this space. So we want to enable banks to innovate.”
2023-11-17 · Odd Lots · The Fed's Michael Barr on Real-Time Payments and the Basel Endgame · IDENTIFIED FROM THE TRANSCRIPT · source
“I do think it's a really critical question. We do need a system that can intermediate effectively for Treasury securities. There appears to be strong demand for Treasury security, so it really is a question of making sure that securities can efficiently get to the right buyer. I think that the SEC's move towards central clearing of Treasury securities might be an additional appropriate next step. We're studying lots of other ways. This is, I would say, ongoing work and will be ongoing work. It was just, as I mentioned, at the Treasury conference yesterday. It's an area that we're paying attention to all the time.”
2023-11-17 · Odd Lots · The Fed's Michael Barr on Real-Time Payments and the Basel Endgame · IDENTIFIED FROM THE TRANSCRIPT · source
“We absolutely have to have a reliable, a stable, a resilient system for trading of treasuries. Treasuries are really at the core of our financial system. They're the way that individuals across the globe price other assets. They're the mechanism for the government to raise funds. They're really at the core of the system. And so we absolutely have to have a reliable, resilient system, a deep system. And so we do need to take the measures necessary to make sure that it stays that way. I think that the kinds of steps that we've taken thus far are useful. For example, one of the steps that the Federal Reserve took is to establish a standing repo facility and a facility for foreign official counterparts so that if there's pressure in the system, that can be released.”
2023-11-17 · Odd Lots · The Fed's Michael Barr on Real-Time Payments and the Basel Endgame · IDENTIFIED FROM THE TRANSCRIPT · source
“Are you going to get through? And so we really are quite focused on making sure that that kind of risk is appropriately attended to by regulated entities.”
2023-11-17 · Odd Lots · The Fed's Michael Barr on Real-Time Payments and the Basel Endgame · IDENTIFIED FROM THE TRANSCRIPT · source
“We aren't really concerned when investors lose money or when they gain money. That's not really any of our business. It's really about are there disruptive events that could cause significant harm to the system. One area that I mentioned very briefly that we're looking at very carefully is the way in which cyber events might cause systemic disruptions. We had a smaller event over the last couple of weeks that we paid careful attention to working with Treasury and other federal regulators. But we wanted to make sure that banks and other participants in the market are resilient to cyber attack. And that means both that they have good prevention systems in place and also that they have good systems for recovery in the event that cyber attacks are successful, which given the way the world is, you have to assume that some of those attacks”
2023-11-17 · Odd Lots · The Fed's Michael Barr on Real-Time Payments and the Basel Endgame · IDENTIFIED FROM THE TRANSCRIPT · source
“Exactly. So in March 2020, hedge funds were among the contributors to the disruption in the treasury market. And so we want to be sure that, first of all, that banks, as they're providing credit to their clients, the hedge funds, are thinking about those risks. And then we also want to make sure that the Treasury market is resilient to those kinds of potential disruptions. So we look very carefully at that. We're looking very carefully at other aspects of the non-bank sector. And all of that, I think, is important for financial stability reasons.”
2023-11-17 · Odd Lots · The Fed's Michael Barr on Real-Time Payments and the Basel Endgame · IDENTIFIED FROM THE TRANSCRIPT · source
“But there are also risks because the activity is being conducted with, in many cases, no margin at all, which means the trades are extremely highly leveraged.”
2023-11-17 · Odd Lots · The Fed's Michael Barr on Real-Time Payments and the Basel Endgame · IDENTIFIED FROM THE TRANSCRIPT · source
“A great point. Look, we need a strong and resilient banking system that's at the core of our financial system. And we need to pay attention to the nonbank sector, but we can't have a weaker bank system because of concerns about the nonbank sector. We need a strong banking system. And then we also need to pay attention to the non-bank risk. So we do spend a lot of time at the Fed and at our sister agencies looking at and examining risks in the non-bank sector. You know, I gave a speech yesterday at the Treasury Market Conference, and one of the things that I noted is that the hedge funds are significant participants in the Treasury market that has lots of benefits in terms of liquidity in that market, in terms of matching activity between the cash part of that market and the futures part of that market in terms of helping asset managers to get access to futures that they want.”
2023-11-17 · Odd Lots · The Fed's Michael Barr on Real-Time Payments and the Basel Endgame · IDENTIFIED FROM THE TRANSCRIPT · source
“So this rule only applies to the largest 37 banks in the country, banks over $100 billion. So community banks are not affected at all. Smaller banks are not affected at all. We do care about compliance burdens even for the very largest banks. We want to make sure that they're commensurate with increased resilience of the banking system that results. But this is not affecting small banks anywhere in the country.”
2023-11-17 · Odd Lots · The Fed's Michael Barr on Real-Time Payments and the Basel Endgame · IDENTIFIED FROM THE TRANSCRIPT · source
“That I've put forward, and I think it makes this a better institution to have that, first of all, the conversation and to trying to teach consensus. And second, if we can't get there to have dissenting voices.”
2023-11-17 · Odd Lots · The Fed's Michael Barr on Real-Time Payments and the Basel Endgame · IDENTIFIED FROM THE TRANSCRIPT · source
“So, you know, traditionally, one of the things that is true of the Fed and that I really value about the Fed is that we're very much a collegial body. We spend a lot of time working with each other, talking to each other, working through issues. And to the greatest extent practicable, we try and get most or all of the board members in favor of any particular thing that we're doing. You know, if I look back over the last year and a half, not quite year and a half, but we've had about 50 substantive either supervisory matters or rulemakings that I've brought to the board for consideration. And almost all of those have been unanimous decisions. It doesn't mean that they are always unanimous. Sometimes we have dissents. And I respect the dissent. So we have board members, one or two board members on a handful of matters that have dissented from the proposal.”
2023-11-17 · Odd Lots · The Fed's Michael Barr on Real-Time Payments and the Basel Endgame · IDENTIFIED FROM THE TRANSCRIPT · source
“That's a great question. You know, one of the cool things about setting up a structure like FedNow is that people can innovate in lots of different ways on it. And I do think that that might be one of the ways that people could innovate over time.”
2023-11-17 · Odd Lots · The Fed's Michael Barr on Real-Time Payments and the Basel Endgame · IDENTIFIED FROM THE TRANSCRIPT · source
“We also do look at comments on any aspect of the rule. We've heard comments already, and I'm sure I'm going to hear more of them soon, that the operational risk charge is too high for some categories of activity. Again, we're open to comment that is evidence-based, that's analytic, that demonstrates that the risk calibration should be different. We want to get the rule right, and we're open to those kinds of comments.”
2023-11-17 · Odd Lots · The Fed's Michael Barr on Real-Time Payments and the Basel Endgame · IDENTIFIED FROM THE TRANSCRIPT · source
“We don't consider the non-risk factors, I would say, related to tax credits. But if the risk of those tax credits is lower, then that is exactly something that we”
2023-11-17 · Odd Lots · The Fed's Michael Barr on Real-Time Payments and the Basel Endgame · IDENTIFIED FROM THE TRANSCRIPT · source
“And that's the kind of comment that is useful to us. We'll look at that. We'll examine the analysis, the empirics of it. And if that proves out to be true, then we can make an adjustment.”
2023-11-17 · Odd Lots · The Fed's Michael Barr on Real-Time Payments and the Basel Endgame · IDENTIFIED FROM THE TRANSCRIPT · source
“We do take all those kinds of issues into account. We're in the phase of our rulemaking where we've issued a proposal, we're taking comment on that proposal. We really are open to all kinds of input on the proposal. We want to make sure we get it right. If there are areas that we can improve it, we certainly will. One of the areas that you mentioned is with respect to energy. Some people have come to us and said, we think that the way you're treating in the proposal tax credits, equity tax credits, doesn't appropriately take into account the way in which repayment occurs under the tax credit. Because in a normal equity investment, the return of the investor is from the investment itself. And in these tax credit deals, we should think of those as having the return coming from the tax credit. The tax credit is a regular source of payment. So you should think about this tax credit differently from other equity investments.”
2023-11-17 · Odd Lots · The Fed's Michael Barr on Real-Time Payments and the Basel Endgame · IDENTIFIED FROM THE TRANSCRIPT · source
“Don't get answered, you know, because it really goes back to my point earlier, the pandemic really did significantly disrupt our economy, and it disrupted many of the ways that we think about economic relationships in our economy. And so it does require us to really look at a very broad range of indicators as they come in and not just a single data point as evidence of now I know that we're in the right place. So I would say I am and generally as a committee we are cautious about overinterpreting any one data point.”
2023-11-17 · Odd Lots · The Fed's Michael Barr on Real-Time Payments and the Basel Endgame · IDENTIFIED FROM THE TRANSCRIPT · source
“So, I think it's useful for us to take that information in. Certainly the information that we've had recently suggests that we're moving into a better balance on the risk between over-tightening and undertightening. And I think that's quite encouraging. So we're likely at or near the peak of where we need to be in terms of having a sufficiently restrictive stance of monetary policy that we'll sustainably bring inflation down to 2%. And I think the recent economic readings reinforce my view that that is probably correct.”
2023-11-17 · Odd Lots · The Fed's Michael Barr on Real-Time Payments and the Basel Endgame · IDENTIFIED FROM THE TRANSCRIPT · source
“Thank you. Look, we take all this data as it comes in, and we're very data dependent, but we're also not dependent on any one single data point.”
2023-11-17 · Odd Lots · The Fed's Michael Barr on Real-Time Payments and the Basel Endgame · IDENTIFIED FROM THE TRANSCRIPT · source
“In real time, we do need to be dependent on the data we receive, the data we receive updates helps us update our forecasts for the future. And we are living in an uncertain time. You know, the pandemic caused significant changes to our economy, and those are still working their way through the system.”
2023-11-17 · Odd Lots · The Fed's Michael Barr on Real-Time Payments and the Basel Endgame · IDENTIFIED FROM THE TRANSCRIPT · source
“About the path of interest rates, the FOMC, every other meeting puts out a summary of economic projections that are designed to show what each individual member of the FOMC believes about the path going forward for the economy. It's not a forecast, it's not a collective judgment or consensus document, but it does let the public know what each individual member of the FOMC is thinking about the future path for monetary policy. I think Chair Powell has made it clear that we're going to need to hold interest rates at their peak level for some time in order to make sure that we're on the right path to get inflation back to 2%. And so I do think that kind of communication can help the market, can help the economy, can help businesses plan for the future. Of course, we're all taking in information”
2023-11-17 · Odd Lots · The Fed's Michael Barr on Real-Time Payments and the Basel Endgame · IDENTIFIED FROM THE TRANSCRIPT · source
“You know, first let me just say with respect to interest rate risk, we expect banks to be able to manage interest rate risk whether rates are rising or falling. That's part of prudent risk management. The Federal Reserve does communicate quite often about the past.”
2023-11-17 · Odd Lots · The Fed's Michael Barr on Real-Time Payments and the Basel Endgame · IDENTIFIED FROM THE TRANSCRIPT · source
“There's a lot of work going on. One of the things that we're doing is, again, making sure that examiners feel empowered to act on the basis of the information they have in front of them in a timely way, making sure that they have the tools to put in place mitigation if a firm is getting itself into trouble and the like. We want to make sure that we have a system that escalates appropriately so that if there are significant risks, you don't wait years before action is taken on those. We're making sure that examiners have the training they need to take action when they need it. And, you know, in the current environment, we're focused on things like interest rate risk, liquidity risk, credit risk, particularly in the office sector, and cybersecurity, which is just a fundamental risk that many banks are exposed to.”
2023-11-17 · Odd Lots · The Fed's Michael Barr on Real-Time Payments and the Basel Endgame · IDENTIFIED FROM THE TRANSCRIPT · source
“And it does go to this question of compensation. They were really focused on short-term profits and not looking at all on long-term risks. And that really is inconsistent with the approach that we require of banks to have compensation aligned, not just with how a bank is doing in the short term in terms of profits, but also thinking long-term about risk management.”
2023-11-17 · Odd Lots · The Fed's Michael Barr on Real-Time Payments and the Basel Endgame · IDENTIFIED FROM THE TRANSCRIPT · source
“Management and the board of directors of the bank are responsible for running the institution. And we're not able to come in and run the bank for bank managers. That's their job to do. And in this case, in the case of SVB and some other banks, the banks really sorely mismanaged both interest rate risk and liquidity risk. And they did things that in retrospect you kind of are hedge scratchers. They had, for example, some hedges on some of their interest rate risk and they took those off.”
2023-11-17 · Odd Lots · The Fed's Michael Barr on Real-Time Payments and the Basel Endgame · IDENTIFIED FROM THE TRANSCRIPT · source
“I think you raise a really important point. And we issued a report right after SVB failed. And one of the findings of the report was that supervisors identified the risks at the bank, but they didn't feel empowered to push hard enough to get the bank to take action. And so one of the things that we're making sure of is that supervisors know that they should act with speed and with force and with agility when risks warrant that kind of action. It does take a change of culture. It does require us to really make sure that examiners feel supported and empowered to take that step. We want to make sure that they're trained and that they have guidance to act forcefully. And I do think that all these measures are really critical to making sure we have a supervisory system that's effective. Now, you know, of course, at the beginning and end of the day, banks”
2023-11-17 · Odd Lots · The Fed's Michael Barr on Real-Time Payments and the Basel Endgame · IDENTIFIED FROM THE TRANSCRIPT · source
“But also more broadly for the FOMC and for the board, we care about both issues. Obviously, we have a clear monetary policy mission. We're going to bring inflation down to 2%. That's our job. We're going to do it. And we also need to understand that and do understand that as interest rates rise, that changes dynamics in the banking system and the financial system. We're really attentive to those changing dynamics. Obviously, if we don't have a functioning financial system, we don't have a functioning economy. And so we have to care about financial stability risks in the system. We do regularly monitor these. We have regular reports from our financial stability staff, not only internally at the board, but also to the FOMC. We have an opportunity for members of the FOMC to comment on financial stability issues as we have our discussions. So these things really do.”
2023-11-17 · Odd Lots · The Fed's Michael Barr on Real-Time Payments and the Basel Endgame · IDENTIFIED FROM THE TRANSCRIPT · source
“They both overlap and intersect. So, no, I think it's a great point. So first of all, I have two jobs. I'm a governor and therefore sit on the federal open markets committee and I'm the vice chair for supervision. And so in my own personal responsibilities, those are quite oversecting.”
2023-11-17 · Odd Lots · The Fed's Michael Barr on Real-Time Payments and the Basel Endgame · IDENTIFIED FROM THE TRANSCRIPT · source
“Reduction in value of securities. And under our proposal, those institutions at that size would need to account for that now.”
2023-11-17 · Odd Lots · The Fed's Michael Barr on Real-Time Payments and the Basel Endgame · IDENTIFIED FROM THE TRANSCRIPT · source
“You raised an excellent point. So, you know, what we've done in this proposal is say that those stricter capital requirements should not only apply to the top eight banks in the country, but they should also apply to banks that are over $100 billion. So there are 37 banks in the country that are over $100 billion. There aren't that many. We have over 4,000 banks in the banking system, so less than 40 out of 4,000 are covered. And it would have covered institutions like Silicon Valley Bank if we had had this place in place before. And I think one of the lessons from that experience was that it's important for large banks that might have an effect more broadly on the economy to have that real resilience to them. With respect to Silicon Valley Bank, they didn't have to account for the unrealized losses on their balance sheet.”
2023-11-17 · Odd Lots · The Fed's Michael Barr on Real-Time Payments and the Basel Endgame · IDENTIFIED FROM THE TRANSCRIPT · source
“So it's a very, very small change in the cost of credit and a significant increase in the resiliency of the banking system.”
2023-11-17 · Odd Lots · The Fed's Michael Barr on Real-Time Payments and the Basel Endgame · IDENTIFIED FROM THE TRANSCRIPT · source
“Look, anytime that you change regulation, there are costs and benefits to that regulation. At the same time, when you have higher capital levels, that increases the private cost to banks. Banks use more equity and a little bit less debt to fund their mortgages or their trading activity or the like. The capital proposal that we've put forward mostly changes the rules for trading and other non-lending activity. A very small portion is actually related to lending. And when you look at that increased cost to the banks with respect to capital, that translates on average for a typical loan to an increase if all of it is passed through to the borrower. If there's no competition at all and all of it is passed through to the borrower, the average increase would be 0.03%.”
2023-11-17 · Odd Lots · The Fed's Michael Barr on Real-Time Payments and the Basel Endgame · IDENTIFIED FROM THE TRANSCRIPT · source
“I have been surprised by it. I mean, I do think that some of the advertisements and things you're seeing in the public are extremely unusual for bank regulation. Normally, we issue a proposal, and then we get very detailed comment letters back, and we take those comment letters into account, and we finalize our rule. That's sort of the normal process. So seeing ads at football games, that's kind of unusual.”
2023-11-17 · Odd Lots · The Fed's Michael Barr on Real-Time Payments and the Basel Endgame · IDENTIFIED FROM THE TRANSCRIPT · source
“It's hard for me to say what lots of other people think, but I'll just say just from my perspective, I think the research is important because we might uncover ways to be much more efficient with the payment system. And payment system efficiency can help banks and households and businesses conduct their transactions in a lower cost way. So I'm not super into all the very large claims people make for central bank digital currency, but I do think that the underlying technology, if it can lower costs, improve efficiency, those things are worth researching.”
2023-11-17 · Odd Lots · The Fed's Michael Barr on Real-Time Payments and the Basel Endgame · IDENTIFIED FROM THE TRANSCRIPT · source
“I think it's a great question. Look, I said before that we're a very conservative institution, and we are, but we also need to continue to think about innovation. Fed now will continue to be an important part of the way that we innovate. So we're looking to add additional features to Fed now over time. And those features will make it easier for banks to use, better for banks to use, better for banks to offer to households and businesses. I think those kinds of innovations are really important. And then we're also doing very basic research in newer technologies around distributed ledger technology, using encryption techniques to send payments back and forth. That very basic research might help us to continue to innovate in our payment systems.”
2023-11-17 · Odd Lots · The Fed's Michael Barr on Real-Time Payments and the Basel Endgame · IDENTIFIED FROM THE TRANSCRIPT · source
“I do think we have to look forward to a system in which businesses and households can get their funds right away. We might end up in a situation where we can have a significant effect in reducing overdraft fees, insufficient fund fees, a situation where a small business can get paid right away for the work they've done. That would be a huge benefit for American society. And so I do think that one of the potential upside benefits of FedNow is the ability to actually deliver for households and businesses the kinds of banking services that they want and that would reduce risk to them. I think that's a wonderful thing for society.”
2023-11-17 · Odd Lots · The Fed's Michael Barr on Real-Time Payments and the Basel Endgame · IDENTIFIED FROM THE TRANSCRIPT · source
“But if you look at the situation today, obviously Silicon Valley Bank failed without any new technology. People were able to withdraw very, very quickly. The real issue in Silicon Valley Bank was deep mismanagement of interest rate risk and liquidity risk. And then the highly networked nature of their deposit base. The technology side of that made it possible for them to withdraw, but not in any fancy new technology, technology that's been around since the 1970s. So really what we need to do is focus on the fundamentals for banks to make sure that they are appropriately managing their risks. With respect to the new technology, with respect to Fed now, the individual banks can set their own limits on the way in which they use the technology, they can set size limits if they want. They can cap it. So I don't think it'll introduce new significant”
2023-11-17 · Odd Lots · The Fed's Michael Barr on Real-Time Payments and the Basel Endgame · IDENTIFIED FROM THE TRANSCRIPT · source
“What I would say is you should be thinking about this as taking years to do. Take up is always slow at the start. It's going according to what we thought, but that's very slow, and we expect it to be slow at the beginning.”
2023-11-17 · Odd Lots · The Fed's Michael Barr on Real-Time Payments and the Basel Endgame · IDENTIFIED FROM THE TRANSCRIPT · source
“My expectation is that banks will end up again over time probably adopting both the public rails and the private rails and using them for complementary kinds of services. It's going to take a time. I would say especially for community banks, one of the key issues here is making sure that core service providers get up to speed quickly and offer the service to all the community banks in a fair and equal and accessible way. And so we are very focused on working with those service providers to make sure they're offering that service to community banks.”
2023-11-17 · Odd Lots · The Fed's Michael Barr on Real-Time Payments and the Basel Endgame · IDENTIFIED FROM THE TRANSCRIPT · source
“It has taken a long time. I would agree with that. Look, the Federal Reserve is Conservative institution, and I think that's appropriate. You know, people expect us to be able to provide trustworthy, reliable services, and we earn that trust by being very, very careful about everything we do. And that's true with FedNow as well.”
2023-11-17 · Odd Lots · The Fed's Michael Barr on Real-Time Payments and the Basel Endgame · IDENTIFIED FROM THE TRANSCRIPT · source
“But again, if you look at existing payment systems today, we have private rails for ACH, we have public rails for ACH. I don't foresee this being a conflict. I really do think that banks are going to be able to have optionality in the systems that they use, and they might use different rails for different kinds of payments.”
2023-11-17 · Odd Lots · The Fed's Michael Barr on Real-Time Payments and the Basel Endgame · IDENTIFIED FROM THE TRANSCRIPT · source
“I don't think that if we ended up that way, I don't think that would be a fracturing. We have lots of systems now where larger volume payments travel one route and smaller volume payments travel the other. That could end up being the efficient way to do it. It would be fine if it ended up that way. It also would be fine if there were a mix of transactions on both kinds of rails. They really are complementary. I think that if you move forward many years, we would expect that banks would have access to both kinds of rails. They could choose which rail to send an individual payment on. That would be great.”
2023-11-17 · Odd Lots · The Fed's Michael Barr on Real-Time Payments and the Basel Endgame · IDENTIFIED FROM THE TRANSCRIPT · source
“We actually have a very long history in this country of having both public rails and private rails. That's the way most of our payments technology has evolved over time. And most of our payment systems today have both public aspects and private aspects. We really think of these things as complementary. We work really closely together. David and Mark were taking selfies yesterday. These are close collaborations.”
2023-11-17 · Odd Lots · The Fed's Michael Barr on Real-Time Payments and the Basel Endgame · IDENTIFIED FROM THE TRANSCRIPT · source
“Again, I think the right way to think about this is over the very long term. If you think about any payments innovation, whether it's the development of banknotes or the rise of checks in the 1700s or really any kind of innovation we've seen in payments, they take a very long time to build a network. Once that network gets built and you have scale, then it really takes off and everybody assumes it's been that way forever. So we're really at the very early stages of this.”
2023-11-17 · Odd Lots · The Fed's Michael Barr on Real-Time Payments and the Basel Endgame · IDENTIFIED FROM THE TRANSCRIPT · source