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PAYMENTS SYSTEMS IN THE GLOBAL ECONOMY 34TH ANNUAL CONFERENCE ON BANK STRUCTURE AND COMPETITION Chicago, Illinois May 7, 1998  .....................................................................  Press Briefing •  Thank you for coming. Joining me are Curt Hunter, Chicago Fed director of research, and Jack Wixted, head of Supervision and Regulation.  •  Not even half way through conference, but think it’s gone quite well so far.  •  Thank Curt and his associate, Doug Evanoff, for organizing another outstanding conference  •  Consistent with conference’s 34-year tradition of excellence. And consistent with its reputation as the nation’s leading conference dealing with public policy issues affecting the financial services industry.  •  To start off would like to take a couple of minutes to review what we’ve heard so far.  •  Managing risks in the payments system was a recurring theme during this morning’s panel discussion and the keynote address by Chairman Greenspan.  •  Each speaker noted that the payments system is the lifeline of the economy, the circulatory system that allows the overall economy to efficiently function.  •  The primary objective set forth by each speaker was essentially the same—we should do everything necessary to allow for a payments system that: One — supports rather than hinders economic growth; Two — facilitates rather than exacerbates problems during times of financial stress; and  318  Michael Moskow Speeches  1998  Three — responds to, rather than resists, changes in financial markets, technology, and the overall economy. •  We also heard an overview of the Fed’s review of its role in the payments system.  •  As Alice Rivlin explained, the Fed held extensive discussions with both users and providers of payments services.  •  Based on this feedback, the committee concluded that the Fed should continue to provide check and ACH services and play a more active role in encouraging the transition to electronic payments.  •  We also heard the Bankers Roundtable’s strategies to aggressively pursue the advantages of electronic payments.  •  And representatives from the New York Clearinghouse and CHIPS discussed their strategies.  •  Sessions this after noon include discussions of the growth in electronic payments and the outlook for growth in check usage.  •  Estimate being presented at one session is that the share of non-cash transactions that are electronic will increase from 23% in 1995 to nearly 50% by 2010.  •  So we should see a faster rise in electronics. And our economists here at the Chicago Fed project a decline in check usage. But checks will be with us for many years to come.  •  Looking forward to sessions later today and tomorrow.  •  Curt, Jack and I will be happy to take any questions.  Michael Moskow Speeches  1998  319