The Federal Reserve should play a greater role in electronic retail payments in order to promote the efficiency and integrity of the payments system, Kansas City Fed president Thomas Hoenig said in Frankfurt Monday.

There are “reasons to be concerned about the integrity of this system,” Hoenig said in a speech prepared for a conference sponsored by the European Central Bank and the Dutch central bank.

“Growing levels of concentration and an increasing complexity of systems have invited greater vulnerability to disruption and an enhanced potential for 'single points of failure,’” he said, noting that more than two-thirds of all noncash payments in the United States are now electronic and that three PIN debit networks handle more than 80% of all transaction volume.

— Market News International

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