About Me

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I am deputy editor at The Banker, a Financial Times publication. I joined the magazine in August 2015 as transaction banking and technology editor, which remain the beats I cover. Previously I was features editor at Profit & Loss, an FX and derivatives publication and events company. Before that I was editorial director of Treasury Today following a period as editor of gtnews.com. I also worked on Banking Technology, Computer Weekly, and IBM Computer Today. I have a BSc from the University of Victoria, Canada.

Friday, 21 May 2010

Mid-market CFOs Gain Importance in Boardroom but Face Tough Challenges

11 May 10

Chief financial officers (CFOs) of mid-sized businesses are more frequently being called into top-level discussions around demand and price pressures, business model changes, information strategy and resource allocation. Additionally, over 75% say they have an advisory or decision-making role on the entire company agenda, as opposed to having no role or being an informer, according to IBM's Global CFO Study.

Many mid-market CFOs are now seen as the 'right hand' of the chief executive officer (CEO). "The recession has sealed the fact that the finances are the crux of the organisation because there is no company or business if you can't get your finances right - so everyone is increasingly looking to the CFO," said Alison Curran, a business transformation consultant from IBM Global Business Services in an interview with gtnews.

Clive Lewis, head of small and medium-sized enterprise (SME) Issues at the Institute of Chartered Accountants in England and Wales (ICAEW), agreed: "The recession has brought finances right to the fore and it is now a much more integrated part of management, which makes more demands on CFOs. If you can't get the cashflow and profitability right, then you may not have a future as a company. More people are asking more questions then they ever did before and finance has got to respond in a meaningful, relevant and timely manner. At the beginning of the recession, the CFO probably got involved in cost reduction - the gut reaction to the downturn - and now it has moved on to cashflow management, re-financing where necessary, etc."

Despite the CFOs' elevated decision-making role, the vast majority of those surveyed pointed to a significant gap between the importance of key CFO agenda items and their effectiveness in execution. The largest gaps were found in driving integration of information (32%), talent development (28%), advising on corporate strategy (27%), and managing and mitigating company risk (24%).

"I think CFOs are feeling the strain," added Curran. "Talent is one of their key concerns: they need to make sure they have the right skills and people to help them support the business in making the right decisions."

Challenges

The top challenges facing midmarket CFOs are the pressure to reduce costs, the need for faster decision-making, and the demand for financial transparency.

Midmarket CFOs believe that external pressures (economic, industry, regulatory) will increase over the next three years, while 51% believe that they must make major changes to respond.

Other key findings of the survey were:

* Nearly 60% are not satisfied with their operational planning/forecasting analytical capability.
* Over 40% produce financial metrics manually.
* 50% lack a common planning platform; 36% lack a common reporting platform.
* 47% are poor to average at anticipating external forces.

Value Integrators

Detailed analysis from the study showed that one group of finance organisations, called 'value integrators', were found to consistently outperform their peers in key financial metrics by driving two main qualities across their organisation:

1. Finance efficiency - the degree of common process and data standards across the organisation.
2. Business insight - the maturity level of finance talent, technology and analytical capabilities dedicated to providing business optimisation, planning and strategic insights.

Curran said: "If you combine strong business insight with strong financial efficiency then you become what we have termed a 'value integrator'. It is not just about having the right tools in place, but also having the capabilities in a much wider sense, such as talent and skills, to interpret the data and improve your forecasting and planning capabilities, which in the current environment have become much more important. The ability to predict not just what may or may not happen, but to be able to react more quickly to what happens. The turbulent world has created an increased need for that."

First published on www.gtnews.com 

Credit Remains Top-of-mind for Treasurers

27 Apr 2010

On the eve of the Association of Corporate Treasurers annual conference, the Financial Services Club hosted a panel discussion in London to discuss what corporate treasurers are worried about. One issue came out on top: credit.

Tight credit remains the dominant issue for most corporate treasurers, according to a Financial Services Club panel discussion focusing on ‘What do Bank’s Corporate Customers Think?’.

Held last week, on the eve of the Association of Corporate Treasurers (ACT) annual conference, the panel - consisting of two ex-treasurers and one global transaction banking executive - also identified regulations, risk and the need to cut costs as key concerns for treasurers. The two-day ACT conference starts today in Manchester.

When asked if the banks are still refusing to lend, one ex-treasurer explained that a FTSE 100 corporate in good health doesn’t have a problem accessing credit and now the price of credit is starting to come down; even a FTSE 100 company in bad condition will get help from its banks to guarantee its survival. However, smaller corporates are not getting access to credit.

The bank executive said that his bank had always maintained a cautious outlook that allowed it to continue to lend throughout the crisis - although he admitted that the bank’s risk appetite was more constrained in the current conditions. “There has been a move away from easy money. But just as the growth out of recession is slow paced, so is the loosening of credit,” he said.

The other ex-treasurer added that the treasurer’s focus is now on optimising internal sources of liquidity. “What many cash-rich companies are realising is that the traditional way of managing working capital by squeezing suppliers doesn’t work,” she said. “They are now looking at the end-to-end supply chain cost and exploring ways of using cash on a dynamic basis, for example offering suppliers early payment for discount. This creates a risk-free enhanced return and ultimately a win-win for all.”

“The trend is also towards establishing relationships with strong banking partners,” she added. “But it is hard for banks to commit to all emerging markets, which makes it difficult for a global corporate to have just one bank. Therefore, corporates still maintain a multi-banking environment.”

When asked what banks should focus on other than service, there was much agreement across the panel:

* Straight-talking - honesty/openness from banking partners as to whether they can deliver what a corporate needs.
* Sorting out the mess in their legacy systems, so that banks can react quicker to corporate needs.
* Breaking down organisational silos in banks, so that corporates don’t have to deal with multiple business units separately.
* Harmonise technology, so that corporates can connect to many banks in an agnostic way.

The banking representative put forward the final point on IT harmonisation, saying that the industry had to work toward this goal. “It is patchy across the industry but it has to go in that direction - whether a bank is pulled kicking and screaming or whether it is leading the pack, everyone will have to do it,” he said.

First published on www.gtnews.com 

SWIFT Connectivity: A Villeroy & Boch Case Study

27 Apr 2010

In September 2007, Villeroy & Boch, a leading European lifestyle brand, outsourced parts of its bank connectivity and payments messaging to Broadridge's SWIFT service bureau. In this Q&A, Dr Markus Warncke, treasurer at Villeroy & Boch, explains the reasons behind this move and how it has benefited the company.

Q (gtnews): What made you decide to switch over to SWIFT connectivity?

A (Dr Markus Warncke, treasurer, Villeroy & Boch): We use SWIFT for bank and dealer confirmations for all types of financial transactions, for example foreign exchange (FX) hedges, short-term borrowing or deposits, etc, and also for all types of payment transactions.

Previously, we used fax or email for treasury confirmations, which then had to be manually matched in our back office. In moving to SWIFT connectivity, we now have an automatic tool connected with SWIFT to match all the parameters of a treasury deal. As a result, we have reliable confirmation matching in a short time span. No matter whether it was executed via a web-based platform or by phone, both our counterparty and us know that the deal has been done and both sides have the same information recorded in their books.

We used to use our banks’ electronic banking platforms for transaction authorisations and also file transfer. Similar to most corporates, we have a number of different banks that we deal with, which translated into a multitude of applications. With the conversion to SWIFT, we now have just one IT platform, which means we only pay for maintenance cost on one platform. In addition, SWIFT delivers the highest security level available. Those are the main reasons we changed connectivity.

Q (gtnews): Were there specific market drivers?

A (Warncke): We began the project in 2007 when I took over the treasury. My previous employer transacted via SWIFT and I brought that experience to my new role. I decided that it was strategically important to move from multiple electronic banking platforms to a more homogenous standardised system.

The drivers are not so much from outside the company but more internal - different electronic banking platforms means more maintenance, which is costly, and greater complexity also means higher risk because there are different parallel processes. With one system, you can harmonise the processes and reduce risk.

Q (gtnews): Why did you outsource the connectivity to Broadridge’s service bureau?

A (Warncke): The IT department made that decision. In the end, it was a cost issue because it is not just the investment in hardware but also staff training in terms of SWIFT-specific expertise. They decided it would be more cost effective to outsource the connectivity to a service provider, following the example of most corporates and a number of banks.

Q (gtnews): What size is your IT department?

A (Warncke): It’s quite big - 90 people. The IT department looks after the enterprise resource planning (ERP) system, and customises and maintains the worldwide IT systems out of Germany. It could have been possible to do it ourselves, but the resource and cost issues led us to outsource.

Q (gtnews): What are the advantages to connecting via Standardised Corporate Environment (SCORE) over a Member Administered Closed User Group (MA-CUG) or Alliance Lite, for example?

A (Warncke): At first, the company was only a treasury counterparty (TRCO) member, with one contractual connectivity channel. When we decided to switch connectivity channels, there was the opportunity to use either a MA-CUG with each bank or SCORE, which became available at the beginning of 2007 and allows connectivity to many banks. SWIFT only recently opened a channel for corporates without a bank’s partnership or mentoring, which is the MA-CUG model.

We qualified for SCORE under the rules set out by SWIFT: a company has to be public listed, with a certain turnover, and must operate in a certain number of countries, etc. Also, from our point of view, it was bit of an image thing to be a SCORE partner, rather than part of a MA-CUG. But the main benefit was one standardised contract for all banks, which is what we wanted.

In reality, the standard contract was not that standard after all but different for each bank. There are a lot of standardised parts but there are differences, so we had to read every contract and discuss every change. But basically it was more standard than a MA-CUG contract.

Alliance Lite was not available in 2007 when we made the decision, but I'm not sure that it would suit us anyway since it targets mostly smaller financial institutions and corporates, whereas we have a high volume of payment transactions.

Q (gtnews): What benefits have you gained from implementing SWIFT connectivity?

A (Warncke): The benefits are higher security, reduction in IT complexity and higher visibility of incoming and outgoing funds, because alongside the SWIFT project we centralised payment transactions within treasury. Before 2007, many subsidiaries made their own payments; now, they have to transact through central treasury. In addition, it also improves compliance because we know where the funds are going and we are better able to monitor our cash flow. If it is done locally, it’s a step removed and central treasury does not have a direct grip on the cash flow.

We also streamlined our internal processes and through that discovered that some suppliers have different payment terms with companies within the group. Therefore treasury, together with group purchasing, began a project to harmonise payment terms in our favour. Although this development cannot be directly attributed to SWIFT connectivity, the SWIFT project was an enabler in looking at other processes.

Q (gtnews): How long did it take to go live?

A (Warncke): We adopted a two-stage approach: first to become a TRCO and then a SCORE member. Setting up the TRCO channel and connectivity took about four months. Connecting via SCORE, which included doing the contractual homework, setting up the systems and testing, took about six months. And we did it with our own IT and treasury resources with Broadridge’s help.

Q (gtnews): Were there specific hurdles that had to be overcome?

A (Warncke): Yes, the contractual agreements were a hurdle. Even though there is a standard SCORE contract that has to be initiated with each bank, there are also differences. Each one has to be reviewed and agreed. Additionally, in 2008 when we started the payment transfer, we felt that the banks were also learning how to connect corporates via SWIFT. It wasn’t just a plug and play exercise for the banks - I felt that they didn’t have much experience. So it was a learning process on both sides.

Q (gtnews): How many banks do you deal with? Did you try to consolidate the number of banks during the project?

A (Warncke): Yes, bank consolidation was part of the project. Within Europe we have two banks for outgoing payments, e.g. bulk payments, the supply payments, human resources (HR) payments, etc. However, as a treasury counterparty, we transact with as many as 15-20 banks.

With all of them, we exchange not only deal confirmations but also payments. This is done via FIN message MT 101. But for bulk payments, we use a FileAct payment message with just two banks within Europe, so there was a reduction in the number of bank accounts and banks.

Q (gtnews): What is the impact of the single euro payments area (SEPA)/Payment Services Directive (PSD) on your business? Does SWIFT connectivity help or hinder this?

A (Warncke): I think that SWIFT connectivity is a benefit because we had already centralised the transaction channel. In addition, because we did it - SWIFT and SEPA - together, that made it easier.

Overall, the harmonisation of the European payments landscape due to SEPA and the PSD is a huge benefit. Before there were certain countries that had lower bank transaction fees, such as Belgium, Luxembourg, the Netherlands and Germany, while other countries, such as Italy and Spain, had very high transaction fees. For example, it cost €0.02 for a payment transaction in Germany, while in Italy the cost was up to €2 - 100 times more. So we have moved our payment transaction operations to Germany/Benelux area. This creates a significant savings every year - plus every bank account and cash concentration system that we close down is also a saving. Fundamentally, we could do this more easily because our IT system is standardised.

Q (gtnews): Do you have any future plans?

A (Warncke): Yes, we have future plans for cash management. At the beginning of next year, we will switch to cheaper direct debits - SEPA Direct Debits (SDDs). We have already started the project because there is some homework to do in terms of new mandates, etc.

Another SWIFT-specific implementation concerns letters of credit (LCs), which we use with an export customer where we don’t establish a customer credit limit. The LC is drafted by a foreign bank and usually goes via a domestic bank that gets the information via SWIFT - but then they print it off and send it to us by mail. This is a break in the connectivity and straight-through processing (STP). So we have started a project with two banks here in Germany so that when they get information from a foreign bank, they can route it directly to us.

First published on www.gtnews.com 

90% of UK Banks Believe Incoming Regulation Will Hamper Growth

30 Mar 10

Nine out of 10 UK banks polled believe that incoming regulation is likely to limit business expansion over the coming 12 months, while all banking respondents said that they anticipate spending more on regulatory compliance over the next year relative to the past one, according to the latest CBI/PwC Financial Services Survey.

Across the UK financial service sector, a record high percentage (74%) of the 80 companies polled say they are concerned about the impact of statutory legislation and regulation on their ability to expand in the next 12 months. In addition, the proportion of firms fearing the UK is losing its competitiveness as a financial centre rose again to 85% (from 79% in December).

Despite these fears, and the fact that lending to industrial and commercial companies continued to fall (-9%), confidence has risen, with slightly fewer firms (55%) think the likelihood of further deterioration in financial markets is low compared with December (58%). Also, the highest balance of firms since March 1999 (+34%) expects profitability to increase in the next three months.

Ian McCafferty, CBI chief economic adviser, said: "Financial firms are more optimistic in terms of business performance for the fourth consecutive survey. They have seen an improvement in profitability and there are expectations of further growth. This survey sees the highest number of firms expecting profitability to increase since March 1999 - these are signs of a bounce back.

"Financial services companies hope lending will grow across their customer base over the coming quarter, lifting business volumes and helping profitability. Fears that regulation will hamper growth prospects in the year ahead have reached a record high, however, with companies expecting to have to ratchet up spending on compliance sharply," he said.

Looking specifically at the UK banking industry, Andrew Gray, UK banking advisory leader, PricewaterhouseCoopers (PwC), added: "Banks' confidence is continuing to rise amid predictions that business volumes will show the sharpest increase for three years. Commercial business has been weak during the quarter, but for the first time in two years activity is now expected to pick up and demand from financial and overseas customers is also predicted to be an area of growth. However, retail activity remains an area of concern as growth predictions remain hesitant. Staffing levels are also expected to continue to be an area of constraint, with further reductions predicted for the coming quarter."

Overall, activity in the sector was broadly stable over the past three months, somewhat better than expected, and firms hope to see much better growth in the next three months. The profitability of financial services businesses improved for the third quarter running, and is expected to increase further in the coming three months.

Asked how their business volumes fared in the three months to March, 43% said that volumes rose and 42% said they fell. The resulting balance of +1% is better than the expected -13%. In the next three months, a balance of 48% of firms expects a rise in business volumes, which is the most positive expectation since March 2006 (+58%).

Other key findings of the survey:

* Against expectations, the value of fee, commission and premium income rose (a balance of +14% versus an expectation of -20%). The value of net interest, investment and trading income also rose (+7 is the highest balance since June 2007). In the coming quarter, firms also expect both these types of income will grow.
* Total operating costs (excluding costs of funds) fell, but at the slowest pace since September 2008. Average operating costs per transaction also fell (-28%), and in the coming three months these are expected to come down at a similar rate (-24%).
* Spreads narrowed slightly, with a balance of -11% the most negative figure since December 2007 (-15%). This followed the sharpest widening of spreads in the previous quarter since June 2008, however.
* The trend in cost reduction, combined with increases in fee income and the previous widening of spreads contributed to the third successive quarterly rise in profitability.
* Firms' investment plans for information technology over the coming year are positive again (a balance of +25%), while those planning to spend more on marketing in the next 12 months has risen to a balance +47, which is the highest for 10 years.
* The level of demand is thought to be less of a factor likely to limit expansion in the coming 12 months than it has been since September 2008. The ability to raise funds is also less of an issue for firms, back in line with the survey average.

First published on www.gtnews.com 

Survey Finds 45% of Respondents Unconvinced of European Payments Harmonisation

23 Mar 10

Almost half (45%) of respondents to Travelex's Payments Survey do not believe that harmonisation of European payments is a reality, despite the Payment Services Directive coming into law in November 2009 and the launch of the single euro payments area (SEPA) Direct Debit scheme at the same time. According to the survey, which polled 226 decision makers in banking finance, three in 10 believe that harmonisation is a reality, while 26% are not sure whether it is or not.

"I think it is quite amazing that 30% actually think [harmonisation] is a reality," said David Sear, divisional managing director for Travelex Global Business Payments, in an interview with gtnews. "It proves to me that they haven't recently made a payment. The simple fact is payment services haven't really moved on. Although there has been some progress made in the basic services under SEPA, there isn't a great deal of consumer awareness and, to be honest, I am not sure that there is consumer or business relevance being attached to it."

The survey found the respondents were divided on whether the PSD creates greater value for businesses. Of those who expressed an opinion, 51% agreed this was the case, while 49% disagreed.

When asked to what extent they felt the PSD would facilitate the growth of payment institutions in Europe, 49% of respondents said they felt it was at least likely to facilitate growth, compared to 35% who said it was unlikely to. Almost one in five (17%) stated they were unsure.

The survey also found:

* Just over a quarter of respondents (26%) expected PayPal to continue to have a major influence in more than five years time. Seven percent felt that it would only have a majority share for the next year, perhaps suggesting that they think PayPal is not a popular payment method, or that there are other payment services on the horizon that could soon take a market share from PayPal.
* Two-thirds of financial decision makers felt that it was unlikely that mobile payments will become the main form of payment and card payments obsolete.
* Around three-quarters of respondents (74%) thought it was unlikely that payment technology would be an investment priority for their company in 2010.

"Despite many banks saying they are returning to core banking, it is surprising that such a high percentage of respondents are not investing in payment technology," said Sear. "With the PSD comes a regulatory environment which encourages new entrants and yet banks are not willing or able to invest. There are technology companies and payment institutions that are innovating in this space, and there is a gap created by the larger banks' inability to invest in this kind of technology and capability."

First published on www.gtnews.com 

Intraday Liquidity - How Much is it Worth?

16 Mar 2010

New legislation that increases capital requirements for banks may negatively affect the smooth running of the payments system - this was the fear articulated by both bankers and corporates at the International Payments Summit (IPS) in London earlier this month. Such legislation would mean that banks would have to hold onto more liquidity/collateral, and effectively become more sensitive to the timing of cash flows.

While corporates have seen the disappearance of easy access to intraday credit and a more risk-adverse attitude to credit lines, with some credit lines already gone, banks are now under pressure to consider liquidity pricing. In the session ‘Managing Liquidity and Intraday Liquidity Risk’, Maurice Cleaves, managing director, head of Europe, Middle East and Africa (EMEA) region cash management product management, Deutsche Bank, said: “Intraday liquidity is not a commodity that is free any longer.”

But will banks be able to charge their corporate clients for it? This was an important debate between bankers and corporates at the summit.

In the Corporate Treasurers’ Forum session ‘Challenges Facing Corporate Treasurers in the New Financial Landscape’, Nick Downes, principal consultant, UK financial services, Logica, floated the idea that large unscheduled payments may incur additional ‘liquidity fees’. He suggested that cash management services should be expanded to include liquidity forecasting.

But a straw poll of the corporates in the audience showed that not one was prepared to pay for intraday liquidity.

In the corporate roundtable ‘What Do Corporates Want from Payment Providers Now?’, Ronald Mulder, financial manager, Eurocil Holdings, agreed that intraday liquidity was a big issue, but that corporates and banks should be able to work together to solve the problem. “We didn’t understand why liquidity was such a big issue because, before the credit crunch, everything worked fine. Some of our banks didn’t tell us about liquidity issues until they were upon us - this was a shame because working together we could solve the problem,” he said.

When the plenary audience was polled as to where corporate treasury needs support from banks, working capital management came out on top, with 35.9% of the audience; liquidity management was second with 31.3% of the vote.

2010 - A Year of Cautious Optimism

Daniel Marovitz, head of product management, Global Transaction Banking, Deutsche Bank, opened IPS on a positive note, saying that 2010 will be the year of cautious optimism. He compared this year to 2008, as the financial system headed into crisis and the world was “managed by fear”, and 2009, in mid-crisis, when it was “managed by depression”.

The audience reflected the buoyed sentiment: almost half (43.7%) of those polled thought the euro interest rate will be +25bps by the end of the year, while only 9.3% thought the rate would be lower than it is today. The summit attracted between 400-500 people, majority of which bankers with a smaller number of corporate representatives.

Paul Camp, global head of cash management financial institutions, Deutsche Bank, continued with the upbeat message, highlighting the fact that the global recession is officially over, but made clear that world is in a state of extreme volatility. “In 2009, trade and payment volumes contracted for the first time since 1982. The low interest rates depressed profitability,” he explained. Yet in many ways this was not all bad news for transaction banking for its products were more fully appreciated by the C-suite.

He said that “growth is back, but from very depressed levels” in 2010. “Interest rates will increase eventually. However, regulatory pressure is intense and our clients have become more demanding, while at the same time wanting lower prices for services. In order to grow, we need to investment. We are in a year of transition,” he predicted.

During the first roundtable discussion, however, both Rajesh Mehta, treasury and trade solutions head, EMEA, Global Transaction Services, Citi and Pierre Fersztand, global head of cash management, BNP Paribas, identified the cracks still present in the financial system. “For banks, the big crisis is over; but for corporates, the crisis is not over. Corporates are still waiting for liquidity,” said Fersztand.

Mehta added: “We are not done with crisis. What happens when fiscal/monetary easing is withdrawn? The first shock wave has rippled through financial systems, but the real economy and fundamentals that gave rise to the crisis haven’t moved on. There are places where the aftershocks will be felt deeper and last longer. The growing part of world economy is now re-stocking its inventory.” He did agree with Camp’s opinion that the world is entering a transition period.

The Rise of the Asia - Focus on China

Significantly, this year IPS devoted a portion of the first morning to emerging Asia, with a particular emphasis on China. With an economy that grew by 10.7% in 4Q09, up from 9.1% in 3Q09, China is no longer ‘emerging’ but has established itself as a global player, with India not far behind. Additionally, last year China overtook Germany to become world export champion.

Linda Yueh, director of The China Growth Strategy, Oxford University, led off the discussion with the session ‘A Focus on Growth Markets – How Can Banks Capture the Opportunity Offered by the ‘Asian Century’?’. She highlighted the recent positive developments in the Chinese financial industry: capital market promotion, stock market reforms, growing convertibility of the renminbi (RMB), improvements in laws and regulations, and the opening up of the banking section through initial public offerings (IPOs) of nearly all state-owned banks.

But Yueh also looked at the challenges: the potential asset bubble from the US$1.3 trillion fiscal stimulus issued last year and also cheap money from the West. Another concern is the build up of non-performing loans (NPLs). She said that continued growth is not guaranteed and that interest rate reforms will be key for the region as a whole.

Spokespeople from three Chinese banks - Agricultural Bank of China (ABC), China Merchants Bank (CMB) and Industrial and Commercial Bank of China (ICBC) - participated in a roundtable on ‘How to Leverage Asian Growth Opportunities’. As Pan Kang, chief representative, CMB, says: “This is undeniably the best time in China – ever”, in terms of economic development and improved standard of living for millions of Chinese people.

But there are still big gaps between the urban and rural economic situation, according to Jijun Zhang, deputy general manager of the international department, ABC. He said that China cannot rely on foreign trade in the future but will need to stimulate domestic demand, particularly in the rural areas.

SEPA and the PSD: Not Much to Report

Almost half the conference audience (46.5%) thought that new regulations will have the greatest impact on transaction banking business in 2010. Only a fraction less - 45.7% - also viewed regulations and risk as the biggest constraints on transaction banking.

As Simon Bailey, director of payments, Logica, in an interview with gtnews, said: “No one wants to talk about regulations, yet everybody wants to talk about regulations,” meaning that most are fatigued by the sheer amount of talk around regulations - but a lack of action means the discussions must continue.

And the single euro payments area (SEPA) and the Payment Services Directive (PSD) typify this paradox.

Bailey said: “SEPA has been disappointingly slow. Of course, in 2008 most eyes were on other targets - none the least was basic survival. But there has been - and continues to be - a tension between political will and domestic and bank priorities. The question is: when do we want SEPA? The answer: in due course.”

IPS devoted two afternoon streams to SEPA and the PSD, as well as a standalone ‘PSD Boot Camp’ on the fourth day of the event. So what, if anything, is new?

Michael Thom, retail issues, consumer policy and payments systems, European Commission, gave the details of 10 countries that missed the 1 November 2009 deadline for transposing the PSD into national law: Belgium, Estonia, Italy, Lithuania and Slovakia should have completed the process by the end of February; while Greece, Poland, Latvia, Sweden, and Finland should all be transposed by the end of the year.

Gerard Hartsink, chairman, European Payments Council (EPC), said that the PSD transposition issues are not a “show stopper” for SEPA. Yet Michael McKee, partner, DLA Piper UK, said that there is a danger of a “three-speed Europe”, with some countries not ready until 2011 or even 2012.

The lack of an end date for the decommissioning of legacy payment instruments is a sticking point. Thom said that “all the ducks are in a row” for the proposal of an end date, and yet no concrete proposal has yet been made. Optimistically, Jonathan Williams, director of communications and product strategy at Experian, believes that an end date will be set within the next six months.

First published on www.gtnews.com