That is the question. At least, it seems to be one of the questions swirling in industry conversations and press coverage about the faster payments strategy described in our Strategies for Improving the U.S. Payment System paper published two weeks ago. There are passionate industry voices on both sides of the question of whether the Fed should have an operational role in faster payments or not, and at this point, these voices are attempting to answer the question before any approaches for achieving faster payments have even been identified.
In describing our faster payments strategy, the paper clearly states that the Federal Reserve will not expand our operational role unless we determine, not only that a contemplated service would be expected to yield clear public benefits, but also that other providers alone could not be expected to provide the capability with reasonable effectiveness, scope and equity.
We set the bar high when considering service provision, and for good reason. The private sector is great at innovating to meet market needs and delivering services to end users. We believe that the private sector can achieve much of the change envisioned in the paper, particularly with the Federal Reserve acting as a leader and catalyst to facilitate the collaboration that will be needed.
The Federal Reserve has a long history of successfully engaging with the private sector on payment system improvement. Developing a faster payments capability for the United States is an ambitious and challenging endeavor, but the enthusiasm and support we’ve observed so far for this objective suggests that it can be done with our collective commitment.
Until additional work is completed to determine the best approaches for implementing faster capabilities in this country, questions concerning operating roles of any organization are premature. The to-be-established faster payments task force, charged with identifying effective approaches, is sure to render opinions on the operator question in the course of its work. We welcome all views and look forward to healthy and rigorous debate on the many challenging issues to be addressed in this endeavor.